audit of auto industry article

Category: Automotive and vehicles,
Words: 1222 | Published: 12.16.19 | Views: 739 | Download now



United Kingdom has been a colossal manufacturer of vehicles in last 10 years. Making more that 8 million vehicles and engines and exporting a lot more than 80% of such, UK auto industry stands as a power of the economy. The car industry builds a yearly turnover of around fifty five Billion Pounds and greatest value coming from exports. Nevertheless, the country that has automobile players like, Alexander Davis, Aston Martin, The bentley, BMW, Honda, Honda, Jaguar, etc ., remains said to be within vast impact of getting worse supply string and its reliance on foreign marketplace.

Let us scrutinize the situation of UK car industry getting into an internal and external environmental audit.


Internal environmental taxation is performed to know the position of industry with respect to its own environment. SWOT is among the tools utilized to perform inside audit which can be employed for learning the talents, weaknesses, chances and dangers of the subject matter.


The strengths of UK’s car industry:

1 . Most significant Revenue generating sector

UK’s vehicle industry yearly contributes about 12 Billion dollars Pounds to the economy of UK by simply generating revenue greater than 55 Billion Pounds, every year.

2 . Range in items

Products manufactured by UK automobile market range from different premium and sports vehicles to business vehicles and engines. About 80% with this is exported, yearly.

3. Chief employment generator

The automobile sector in UK is a key employment generating sector, supplying wide range of employment opportunities in manufacturing and R&D.


1 . Difference between producers

UK’s automobile sector is known for achieveing an austere disparity among its suppliers, which stands apart to be a major weakness with this industry.

installment payments on your Depleted Source Chain

Supply sequence of UK automobile industry is going via an appalling stage. A potent source chain and its capacity is an important factor in determining market growth and foreign investment. Intensive improvement, in the supply chain of UK automobile industry, is essential.

several. Dependence on overseas markets

As great britain car market exports around 80% of its create to international markets, it truly is under the likelihood of getting straight dependent on financial crisis of other markets. UK motor sector should focus on reaching as many markets as is possible to ease risk.


1 . Providing eco-friendly vehicles

UK’s automotive aftermarket has been frequently active in innovating new releases to provide a safe and eco-friendly environment, consequently opening up chain of possibilities.

2 . Purchases by Global OEMs

In the year 2013 many global equipment producers have announced investments in British isles. Through these strategic cha?non UK car industry is usually believed to advantage significantly.


1 . Leaping cost of Natural Material

The cost of natural material continues to be ever growing; hence, the pay more for procuring natural material every year. This at some point raises the price of automobiles.

installment payments on your Increasing competition

With new companies coming in UK along with foreign direct investment the competition is bound to soar, finally increasing threat for existing companies.

Bottom-line is that inspite of challenges faced by car industry in last decade, it is resurging from its problem and looking forward to producing more number of vehicles this year.


The automobile sector in UK has been tactically working towards creating new opportunities and enhancing technology. It has thoroughly slogged to create UK more attractive for overseas investors. Through automotive industry’s external analysis, we shall examine influence of external elements on the industry. The two major models mentioned here are PESTLE Analysis and Porter’s Five Forces’ Unit.



To ensure there is not any monopoly created in the industry, certain policies reducing firms coming from forming holding and fixing price have been implemented. They also control the size of automobile businesses.


With the advent of increasing pumpiing across the world, it can be predicted the fact that purchase of automobiles shall increase in coming years. Also, globalisation has opened up doors intended for foreign investors in UK.


Recent researches show that young inhabitants in UK is weak and more mature population can be rising. Therefore, it is advisable that companies focus on creating more products providing to more compact families and older inhabitants.


Increased concentrate on providing eco-friendly vehicles offers encouraged sector to constantly invest in r and d. With popularity of new designing softwares, Gps Systems to get navigation, and so on, technology features advanced two folds.


As people are getting more aware and anxious about a healthful environment, it truly is imperative to create products which might be eco-friendly. Consequently, it has created a pressure for the industry to focus on environmental concerns as well.


Some legal guidelines have been made by UK government just like compulsory fit of Electric Stability Control and Tyre Pressure Monitoring Systems out of all cars created.


1 . Menace from new entrants

Automobile industry being capital extensive requirements a lot of money to venture and uphold. To be able to sustain, present automobile corporations have augmented their creation, enforcing fresh entrants to only about large scale.

installment payments on your Bargaining Benefits of Suppliers

Due to increase in globalisation the industry has suppliers not only from UK but as well from around the world. Hence, the bargaining power of suppliers is restricted. As some manufacturers have became a member of hands with OEMs supply by china manufacturer and India others source materials coming from UK itself.

3. Bargaining Power of Customers

It brings forth the fact that purchasers include a power to regulate industry and increase competition. Since consumers get access to extensive details and choice of numerous brands across the globe they definitely stand to experience a better negotiating power.

5. Competition coming from Substitutes

Substitute products are those that can be used in place of virtually any product. For instance, people of UK may as well employ public travel instead of exclusive cars. They might also consider the option of using leased cars.

5. Existing Competition

As UK houses around 50 car manufacturers selling two hundred models, the internal competition among the list of companies can be inevitable. Apart from the local car manufacturers like GM, Kia, etc, the other manufacturers are giving a lots of competition.

The external impact on play a major role in casting way forward for automobile market in UK. Analysing the interior as well as the exterior environment of UK’s car industry allows identifying how it has been executing and precisely what is the opportunity for improvement.

United Kingdom provides an array of car models within a highly competitive market. Nonetheless, it is continue to facing a lot of issues in recovering from yesteryear downfall. Marketplace experts foresee that the industry shall still cater to the brand new more challenging market.


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