Paper 3 - Key facts about car industry

Question 1

What are some social trends in the car market?

Answer 1

2.4 million people bought cars on finance

Question 2

What are some technological trends in the car market?

Answer 2

Growing e-commerce, CAZOO and carsupermarket.com

Question 3

What are some economical trends in the market?

Answer 3

High IR and high inflation means people can afford less, COVID reduced incomes and consumer confidence, 1/3rd of global economy going to be in a global recession

Question 4

What are some political trends in the market?

Answer 4

• BREXIT means higher import prices
• Pandemic lead to the closure of car dealerships
• Huge change to driving habits with more people working from home and so drive less

Question 5

What are some legal trends in the market?

Answer 5

• Expense of getting an MOT
• road tax favours, fuel efficient cars

Question 6

What are some environmental trends in the market?

Answer 6

• Ban of diesel cars in 2023
• More ULEZ areas
• Road tax favours electric cars

Question 7

What are the 3 main ways consumers tastes have been changing?

Answer 7

• Most popular car colour in 2021 as grey - 24.8%
• Niche market colours like gold and green where fastest growing
• Electrical cars are the cheapest cars in the market

Question 8

What is a simple SWOT analysis on the competitive car environment?

Answer 8

S = Customers are loyal to car dealerships etc
W = Limited car production takes place in the UK
O = Highly skilled labour
T = BREXIT may have potentially made trade expensive

Question 9

3 main facts about car maintenance?

Answer 9

• Car maintenance jobs in the future may fall if electric vehicles demand increases
• Petrol is the most popular car type
• Number of job vacancies in the car sector fell

Question 10

Bargaining power of buyers in Porter’s 5 forces

Answer 10

• Consumers tend to negotiate a cheaper price with car dealerships

Question 11

Bargaining power of suppliers in porters 5 forces

Answer 11

Suppliers of cars can charge higher prices

Question 12

Threat of substitutes in porters 5 forces

Answer 12

Consumers are becoming more brand loyal but more car dealerships could increase substitute threat

Question 13

Threat of new entrants in porters 5 forces

Answer 13

New online entrants in the market - increased convenience

Question 14

The degree of rivalry in porters 5 forces

Answer 14

Lots of different car retailers in the UK and globally

Question 15

Two successful traits of entrepreneurs

Answer 15

Creativity - first movers advantage of being an online entrant
Communication - Encourage stakeholders to be part of the business idea

Question 16

Technical resources in resource management

Answer 16

• Modern day car production is capital intensive
• Specialist technology is needed

Question 17

Financial resources in resource management

Answer 17

• High capital expenditure
• Labour is skilled required higher salaries

Question 18

Inventory planning in resource management

Answer 18

• JIT is used in car manufacturing
• If a car doesn’t sell it will depreciate in value

Question 19

Production planning in resource management

Answer 19

• Majority of cars are made using batch production
• Some high end cars made with job production

Question 20

Physical resources in resource management

Answer 20

• Requires land to stock cars and test drives
• Digital car retailers spend nothing on car holdings

Question 21

Recruitment and selection for managing people

Answer 21

• Smaller businesses may advertise in the newspaper
• Larger businesses may have an online application - INDEED

Question 22

Wage rate for managing people

Answer 22

£10.42 hour minimum wage for over 23 year olds
- Some receive the national living wage

Question 23

Human resources for managing people

Answer 23

• Larger businesses tend to have a HR department

Question 24

Employment contracts for managing people

Answer 24

• Many employers use a zero-hour contract because it is cheaper
• Full-time, permanent, zero-hour contract

Question 25

2 main Facts about the COVID-19 pandemic

Answer 25

• china has has a zero-covid policy
• 16% of jobs in retail and repairs were furloughed

Question 26

One fact about BREXIT

Answer 26

• Car manufacturing has faced higher prices as a result of overseas suppliers charging more

Question 27

2 main facts on the growth of electric vehicles

Answer 27

• In 2021, the total car sales of electric vehicles was 10%
• China sold the most electric vehicles in 2021 but in developing economies demand is low as they are unaffordable