Pestel Automobile Industry Essay

567 WordsMay 17, 20143 Pages
In order to analyse the environmental influences the concept of PESTEL will be employed within which scope the following six categories will be examined: political, economic, social, technological, environmental and legal (Johnson, Scholes & Whittington, 2011, p. 50). The following PESTEL analysis shows the main trends in the business environment in general and at the same time points out the most significant trends in the automobile industry in 2004 that might affect BMW. Political factors: The recession from 2001-2003 led to great uncertainty about oil supplies. This indicates a possible rise of fuel prices which – depending on the extent – can have negative impacts on the sales figures of BMW cars. Economical factors: After the recession from 2001-2003, global markets had to deal with falling equity prices and geopolitical tensions. In addition to that, there was great uncertainty about the economic and political environments. All that affected the climate on the automobile markets where sales declined significantly in almost all the countries apart from the UK, Scandinavia and China. Moreover, various car companies ran price competitions that finally ended up in depressed profitability of the whole industry. In addition to that, some of the car manufacturers also suffered from depressed demand and oversupply. Car makers also depend on currency changes what is especially important in the case of BMW that still mostly produces its cars in Germany. Social factors: In terms of the social factors, changes in the buying patterns after the recession are especially important. Customers need time to trust the business again and therefore, the spending power remains low what will also affect the sales figures of BMW. Moreover, thanks to the technological development of the internet customers have become very informed and more aware of different developments such as

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