* Political insatiability affects the sales of the automobile industry. The political instability has a direct impact on the sales of the automobile industry. When there is a political unrest the purchasing power of the individuals in the particular area goes down. * Government support towards the industry favourably.
This industry is the 6th largest industry in the world and brings out a lot of revenue and creates employment opportunities. Therefore governments tend to help and protect the industry. Eg: USA bailed out GM and Chrysler * Taxes and levies charged against the automobile industry has a negative impact on the sales Many countries tend to have taxes or duties against the automobile industry; this may either be to protect their own local manufacturers, to gain revenue, or to discourage buyers due to traffic congestions. (Many BRIC countries today face the issue of traffic congestion). These may be to enact price or exchange controls as well. These additional charges would discourage buyers and reduce sales. * Strict rules and regulations related to the automobile industry throughout the world Governments tend to have strict rules and regulations with regard to the protection of the environment, employment laws (where safety of the employees is a must), and etc. * Trade Restrictions
Many governments, in order to encourage local manufacturers have trade restrictions in place. The best example would be the US automobile market where a specific quota is allocated to Chinese and Korean car manufacturers. This is one of the reasons Toyota had to setup their own manufacturing plant in USA which created employment opportunities in USA. * Car Scrappage programmes by governments
These are government initiated programmes aimed to promote the replacement of old vehicles with modern ones. This is done with the dual aim of boosting the automobile industry and removing inefficient, high emissions vehicles off the road....
Please join StudyMode to read the full document