Current trends

Question 1

(P)estle

Answer 1

brexit - might lead to an increase in cost of raw materials, however there’s a tariff free trade deal
-loss in potential buyers - inter-trade
covid - new car production fell by 29.3% in 2020
- eu remained the UK’s biggest export destination taking 53.5% share
- UK’s main car export - Land Rover defender to states 2022

Question 2

Covid affects

Answer 2

• many employees worked from home due to restrictions - fewer cars on road
• reduced usage = less servicing and less maintenance

Question 3

P(e)stle

Answer 3

• exchange rate - can influence a retail business’s profitability as it affects price of imported and exported goods
  -the pound is currently weak against euro and us dollar
• economic growth - has been volatile and weak over 10 years
  -2008 recession - economically challenging
  -economy went through decline through covid - through lockdowns
• wage growth - due to high inflation - real disposable incomes falling

Question 4

Federation of Small Businesses (fsb)

Answer 4

• 424% rise in gas costs
• 349% rise in electricity costs
• reduce profit margins as revenue has to cover higher operating costs

Question 5

P(e)stle

Answer 5

• interest rates - 0.1 at start of pandemic
• rose to 0.25 in December 2021
• 2022 - 3.5%
• higher I.R = more expensive to borrow - mortgages increase - reducing disposable income - as many customers finance cars
• inflation - war in ukraine = uncertainty and restricted supply of gas/electricity/fuel
• increase wage pressures on businesses have led to increase in operating expenses

Question 6

Pe(s)tle

Answer 6

• more customers buy a used or new car using finance than from personal sources
• the car finance market was worth 37.4bn in 2014 - (2022) over 2 mil cars were bough using car finance
• peoples views on car ownership have changed - people hiring cars for limited time periods rather than buying their own = offers flexibility

Question 7

Pes(t)le

Answer 7

• those wishing to buy a brand new car can ‘build’ the car online by selecting different options through the website
• customers can explore the price and adapt options to fit their budget
  -(2012) - only 9.4% of total retail sales were online currently 30%

Question 8

Pest(l)e

Answer 8

• legal requirements to owning a car - annual MOT and general maintenance of car
• to be an MOT test centre, garages have to fulfil specific requirements
• by 2030 sale of new P/D cars will be banned = govt commitment to net zero
• govt is keen to encourage customers to buy cars with lower emissions via the car tax required - road tax system favours

Question 9

Pestl(e)

Answer 9

• govt intervention
• in jan 2023 - ev sales overtook petrol - expensive upfront cost by cheaper running costs
• customers are becoming increasingly aware of the need to live more sustainably
• since 2019 ev have increased in popularity - especially hybrid electric and battery electric