The Automobile Industry: The External Analysis Of The Auto Industry

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External Analysis of the Auto Industry
Cars play an important role in our lives. Cars allow us to move around in less time than walking and they also give us more autonomy considering that we can go wherever we want.
Having a car allows us the convenience that public transportation cannot. Cars have an enormous effect on our lives that we must understand how the auto industry affects or economy. Furthermore, we must be aware of external factors that affect the auto industry. Having knowledge of the environmental factors influencing the automotive industry allows us to make better decisions when purchasing a vehicle. The environmental factors that we must look at include political, economic, technological, demographic, socio-cultural, and global.
“In January of 1972, NHTSA began requiring that all passenger cars, multipurpose passenger vehicles, trucks and buses meet Federal Motor Vehicle Safety
Standard (FMVSS) No. 208, Occupant Crash Protection.(2) The main dynamic performance requirement in this standard involves successful crash testing of a test vehicle into a rigid barrier with both restrained and unrestrained adult dummies at any speed up to and including 48 kilometers per hour (kph), or 30 miles per hour” (National Highway Traffic Safety
Administration, 1997). The National Highway Traffic Safety Administration and the
Environmental Protection Agency have taken steps to reduce greenhouse gas emissions from vehicles. The newest fuel economy standards are “protected to: Cut 6 billion metric tons of GHG over the lifetimes of the vehicles sold in model years 2012-2025; Save families more than $1.7
Page 2 of 6 trillion in fuel costs; Reduce America’s dependence on oil by more than 2 million barrels per day in 2025” (US EPA, 2015). Evidently, government intervention in the automotive industry determines how auto makers produce and market their vehicles.
The auto industry has been facing economic pressures as more car companies enter
The auto industry will have to adapt to the changing preferences of the everyday citizen. More and more people are moving into the city close to their jobs (Dawid, 2016). Younger people are more reliant on their smartphones. These are lifestyles trends that car companies will have to keep up with. Globalization allows for a competitive automotive industry. It has allowed for cars to be “designed in one country and built
Page 4 of 6 from components that originated in a number of countries by a company based in a third country” (Global Education, 2014). Globalization gives people more options to choose from, which in turn increases competition within the automotive industry.
Indeed, understanding how the automotive industry responds to external factors helps us, the drivers, make better decisions at the time of buying a new vehicle. This also helps us better predict where the future of the auto industry is heading. Even though less people will be driving cars, technological innovations and an ever increasing population will surely allow this industry
to

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