The automotive industry has been highly competitive all over the world. Automakers form their strategies based on the external factors in political, economic, social, technological, environmental, and legal change within their industry. Using PESTEL analysis will allow managers to watch how changes in each part affect their industry, forcing change in order to stay competitive. Performing this analysis periodically will help identify macro changes faster.
Governments around the world play a key role in how an automotive company will be able to compete. In the United States there are many emission control regulations that have been put in place that other countries don’t have to follow when using vehicles. The Clean Air Act was put in place in 1970 after concerns of pollutants in the air causing health issues. Car companies were required to reduce hydrocarbons and carbon monoxide by 90 percent in cars made...
Consumers will spend more on a vehicle just to have certain brand. Its perceived that when you have an expensive car, others will think you are “doing well financially”. (consumerreports) Car companies need the demand for the perceived status, so the luxury brands began to offer more affordable “entry-level” premium cars. Mercedes-Benz offers an entry level CLA starting at $32,700, which has a number of upgrade options that will increase the cost of the vehicle. This price is comparable to Chevy’s fully loaded Impala.
The internet and social media allow buyers to fully research almost everything about the car that they are interested in. Websites like Edmunds.com and KBB.com allow interested new car buyers look at reviews that are posted by current owners of the vehicles. Since the consumer has so many tools at their disposal, car companies cannot hide anything knowing that it would hurt their brand reputation if it were to get...
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