From its humble beginnings from in 1885 today the automotive industry is one of the biggest industries today and is one of the world’s most important economic sectors by revenue. Not only does this industry develops and manufacture but it also markets and sells motor vehicles
STEEP Analysis onSocio-cultural
Socio-cultural variables such as population, social responsibility, cultural differences, and theinfluence of consumer movement affects directly to the automobile industry.Most of the people concerns the price, mileage, brand of the car, design and style, after salesservice when purchasing a vehicle and depends on what other people think about their vehicle.Age distribution is a factor that directly influence when focusing on sales among population,And should be able to develop segments that able to satisfy different needs of age groups.When purchase vehicles the families are more sensible factor which influence car purchasedecision. Space, safety and budget play a major role. Need to focus on corporate customers since they buy the largest amount of vehicles .
Technological factors and innovations, Research & development plays a most important role asthey improve standards of driving.Fuel consumption is one of a major problem at the moment, hybrid engines has developed toreduce fuel consumption. Ex: Honda, ToyotaOne of a major requirement of the customer is safety. Seat belts, air bags which protect passengers at a collision, ABS brakes to stop the vehicle in short distance even in icy surfaces.By investing for Research and development and innovating new technologies can gain patentedand boost sales.Technological development is support the driver to control the vehicle more comfortable andeasier. Ex: Auto gear, auto parking, Navigation system.
Over the years prices of automobiles have increased due to the rise of the inflation. In terms ofinfrastructural developments the automobile industry is one of most demanding. One of themajor external factors that affect the price elasticity comes from the oil dependency. Some otherfactors that cause shifts in supply & price elasticity;
Government taxes on manufacturers.
Prices of external resources (Ex: price of Steel will increase the price of vehicle)
Buying capacity of people
Level of economical activities.
Commercial use of automobilesTo lower costs outsourcing of materials, components and some services were increased andtechnology advancement leads to drop the prices. This industry brings substantial economic benefits to mother countries.Some of negative affects and factors of externalities
Inadequate infrastructure for transport operations
Cost of running a vehicle
The automobile industry is largely responsible for traffic congestion.
Dependent on fuel economyHigh petrol prices do not always bring about a fall in demand for vehicles since a new car isoften more fuel efficient than an older offering the buyer the chance to save money. New cars are coming with more fuel efficiently than older, its offers buyer a chance to savemoney.
Environment factors such as fuel economy, pollution, emission etc are the industry’s biggest challenges. Environmental considerations lead manufactures for innovations. More environmentfriendly vehicles like hybrid cars were introduced and demand for such products are increasing. Issue
Ozone layer destruction
Emission of CFC
Use systems that eradicateCFC
Emission of Carbon Dioxide
Compact cars, minivans
Noise & air pollution
Dust collectors, electronicinjections etc.
Political and legal forces:
Political forces, both at home and abroad, are significantly influence to automobile industry. Hybrid vehicles have more demand and more government support due to environmental friendliness. All new...
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