Paper 3 - Key facts about car industry Flashcards
What are some social trends in the car market?
2.4 million people bought cars on finance
What are some technological trends in the car market?
Growing e-commerce, CAZOO and carsupermarket.com
What are some economical trends in the market?
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
What are some political trends in the market?
- 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
What are some legal trends in the market?
- Expense of getting an MOT
- road tax favours, fuel efficient cars
What are some environmental trends in the market?
- Ban of diesel cars in 2023
- More ULEZ areas
- Road tax favours electric cars
What are the 3 main ways consumers tastes have been changing?
- 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
What is a simple SWOT analysis on the competitive car environment?
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
3 main facts about car maintenance?
- 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
Bargaining power of buyers in Porter’s 5 forces
- Consumers tend to negotiate a cheaper price with car dealerships
Bargaining power of suppliers in porters 5 forces
Suppliers of cars can charge higher prices
Threat of substitutes in porters 5 forces
Consumers are becoming more brand loyal but more car dealerships could increase substitute threat
Threat of new entrants in porters 5 forces
New online entrants in the market - increased convenience
The degree of rivalry in porters 5 forces
Lots of different car retailers in the UK and globally
Two successful traits of entrepreneurs
Creativity - first movers advantage of being an online entrant
Communication - Encourage stakeholders to be part of the business idea
Technical resources in resource management
- Modern day car production is capital intensive
- Specialist technology is needed
Financial resources in resource management
- High capital expenditure
- Labour is skilled required higher salaries
Inventory planning in resource management
- JIT is used in car manufacturing
- If a car doesn’t sell it will depreciate in value
Production planning in resource management
- Majority of cars are made using batch production
- Some high end cars made with job production
Physical resources in resource management
- Requires land to stock cars and test drives
- Digital car retailers spend nothing on car holdings
Recruitment and selection for managing people
- Smaller businesses may advertise in the newspaper
- Larger businesses may have an online application - INDEED
Wage rate for managing people
£10.42 hour minimum wage for over 23 year olds
- Some receive the national living wage
Human resources for managing people
- Larger businesses tend to have a HR department
Employment contracts for managing people
- Many employers use a zero-hour contract because it is cheaper
- Full-time, permanent, zero-hour contract
2 main Facts about the COVID-19 pandemic
- china has has a zero-covid policy
- 16% of jobs in retail and repairs were furloughed
One fact about BREXIT
- Car manufacturing has faced higher prices as a result of overseas suppliers charging more
2 main facts on the growth of electric vehicles
- 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
