Impact Of Recession On The Car Industry Essay

521 WordsOct 30, 20093 Pages
The car industry is even more deeply affected by recessions hence; the recession has major impact on Jaguar cars. This is because Jaguar cars rely upon their consumers. However due to low funds in the economy, the demand in cars begin to fall. This is because buying a luxury car is not a necessity, it is discreet expense therefore the individuals will not purchase cars. This attitude will cause the Jaguar sales to drop resulting in low profitability. This clearly goes to show that the car industry in this case the Jaguar cars will be affected by the recession far more than other industries. Recession in just England shouldn’t have major impact on the organisation since 75% of their sales are oversees, which means they could begin to focus more on the exportation of the cars into different countries and expand their range by exporting cars to different countries. However, the current recession is global hence all Jaguar consumer countries are facing recession, especially America who are their 50% consumers, which is causing the business to suffer, and lose money. The share price is also likely to drop during recessions, which may lead to the shareholders not wanting to re-invest in business. This may cause the Jaguar to have lower budgets which may force them to decrease their prices. Nevertheless that is unlikely to happen as Jaguar is s premium brand, and reduction in prices will mean the business will lose their high standard image in the eyes of audience, which will cause them to drop from premium brand as lower prices would mean a wider range of society will be able to buy them, causing them to become more popular leading Jaguar cars unable to be a higher demanding positions as the image of the business would become standard as oppose to premium. In addition, their low prices will reflect their struggle with budgets and problems with cash flow,

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