Audit of Automobile industry Essay

AUTOMOBILE INDUSTRY IN UK unify Kingdom has been a surpassing manufacturer of elevator machinemobiles in last 10 years. Producing more than(prenominal) that 8 million vehicles and engines and exporting more than 80% of these, UK railroad elevator car manufacture stands as a driving string of its economy. The railcar exertion generates a per year turnover of around 55 million Pounds and erectst value from exports. Nevertheless, the country that has carmobile hornswoggleers same(p), black lovage Davis, Aston Martin, Bentley, BMW, Ford, Honda, Jaguar, etc., is still said to be chthonic a vast influence of dwindling away supply chain and its dependence on unlike market. Let us visit the situation of UK automobile exertion by doing an internal and outside(a) environmental examine. immanent AUDITInternal environmental audit is performed to understand the position of labor with obligingness to its own environment. SWOT is one of the tools apply to perform interna l audit which is industrious for studying the strengths, weaknesses, opportunities and affrights of the subject.STRENGTHSThe strengths of UKs automobile pains1. Largest Revenue generating sectorUKs auto constancy yearly contributes around 12 Billion Pounds to the economy of UK by generating revenue of more than 55 Billion Pounds, annually.2. miscellany in productsProducts manufactured by UK automobile application range from various exchange premium and sports cars to commercial vehicles and engines. Around 80% of this is exported, yearly.3. tribal chief battle generatorThe automobile manufacturing in UK is a study business generating sector, offering wide range of employment opportunities in manufacturing and R&D.WEAKNESSES1. disparity amid manufacturersUKs automobile industry is known for having an austere disparity between its manufacturers, which stands out to be a major weakness of this industry.2. Depleted Supply arrangeSupply chain of UK automobile industry is going through an appalling phase. A potent supply chain and its might is an important factor in find out market expansion and foreign investment. gigantic improvement, in the supply chain of UK automobile industry, is essential.3. Dependence on foreign marketsAs the UK car industry exports around 80% of its produce to foreign markets, it is under the lay on the line of getting directly dependent on economic crisis of other markets. UK motor industry should guidancesing on reaching as many markets as possible to hush up risk.OPPORTUNITIES1. Providing eco-friendly vehiclesUKs automotive industry has been endlessly active in innovating un characterd products to pull up stakes a safe and eco-friendly environment, hence commencement up string of opportunities.2. Investments by orbicular OEMsIn the year 2013 many international equipment manufacturers eat up announced investments in United Kingdom. Through these strategic alliance UK auto industry is believed to benefit signi ficantly.THREATS1. Soaring personify of Raw MaterialThe cost of earthy material has been ever rising hence, the manufacturers deport more for procuring raw material each year. This eventually raises the charge of automobiles.2. Increasing tiltWith vernal companies coming in UK along with foreign direct investment the tilt is bound to soar, ultimately change magnitude threat for existing companies.Bottom-line is that in spite of challenges face by automobile industry in last decade, it is resurging from its downfall and looking out front to producing more number of vehicles this year.EXTERNAL environmental ANALYSISThe automobile industry in UK has been tactically working towards creating parvenu opportunities and enhancing applied science. It has prolongedly slogged to make UK more attractive for foreign investors. Through automotive industrys external analysis, we shall study influence of external factors on the industry. The two major pretendings discussed move ove r atomic number 18 PESTLE Analysis and porters Five Forces Model.PESTEL ANALYSIS brassalTo ensure there is no monopoly created in the industry, certain policies restricting firms from forming cartels and fixing price have been implemented. They also control the surface of automobile companies.EconomicWith the advent of increasing inflation crosswise the world, it is predicted that the purchase of automobiles shall sum up in coming years. Also, globalisation has unfastened doors for foreign investors in UK.Social new researches show that young population in UK is declining and older population is rising. Hence, it is advisable that companies focus on creating more products catering to little families and older population.TechnologyIncreased focus on providing eco-friendly vehicles has encouraged industry to continually invest in research and development. With popularity of new designing softwares, Global Positioning Systems for navigation, etc, technology has advanced two fold s.EnvironmentalAs community are getting more aware and concerned about a healthy environment, it is imperative to create products that are eco-friendly. Hence, it has created a pressure on the industry to focus on environmental issues as salutary.LegalA few level-headed policies have been imposed by UK government like compulsory fitment of Electronic constancy Control and Tyre Pressure observe Systems in all the cars produced.PORTERS FIVE FORCES MODEL1. Threat from new entrantsAutomobile industry being heavy(p) extensive demands a visual sense of bills to venture and uphold. In order to sustain, present automobile companies have augmented their production, enforcing new entrants to enter only on large scale.2. Bargaining Power of SuppliersDue to attach in globalisation the industry has suppliers non only from UK but also from crossways the world. Hence, the bargaining power of suppliers is limited. As close to manufacturers have joined hands with OEMs from china and Ind ia others source materials from UK itself.3. Bargaining Power of BuyersThis model brings forth the fact that purchasers have a power to regulate the market and subjoin rivalry. As consumers have access to extensive information and choice of numerous brands across the globe they definitely stand to have a better bargaining power.4. rival from SubstitutesSubstitute products are those that can be consumed in place of any product. For instance, people of UK can as well use public transport instead of mystical cars. They may also consider the extract of using rented cars.5. Existing CompetitionAs UK is home to around 50 car manufacturers selling 200 models, the internal competition among the companies is inevitable. Apart from the local car manufacturers like GM, Ford, etc, the foreign manufacturers are also tolerant a lot of competition.The external influences play a major role in casting future of automobile industry in UK. Analysing the internal as well as the external environme nt of UKs car industry helps identifying how it has been performing and what is the range of a function for improvement.United Kingdom offers an array of car models in a highly hawkish market. Nonetheless, it is still facing a lot of issues in recovering from the past downfall. marketplace experts predict that the industry shall still be able to cater to the new more demanding market.