Futures: Enterprise Opportunities and Sector Responses

Report on Futures: Enterprise Opportunities and Sector Responses

Introduction to Automobile Sector

For the purpose of absorbing the shock of the financial crisis and maintaining a rational chance of circumventing irreversible and disastrous harm to the ecological systems, taking actions has become a necessity. The economy crisis has put the sales of automobiles and especially cars in jeopardy. The automobile sector is one of the major employment providers. Therefore, any sort of disturbance in this sector has the capability of affecting both the social and economic fabric of the European continent (Anderson and Anderson, 2010). This is the reason for which the car sector was made the main focus of the recovery assignment of the European Commission. In addition to this, the increasing apprehension over the mounting carbon emissions has compelled the automobile sector of Europe to develop better and advanced automotives that run on alternate fuels. The industry is even coming up with car sharing infrastructures which will further promote the use of eco or hybrid cars (Bernabo and et.al, 2009). The present report delves into the automobile sector of Europe and identifies the trend analysis of hybrid and eco-friendly cars. The different opportunities and risks that lie ahead of them will be analyzed.

2.1 Trend Analysis

The trend analysis of the hybrid car market of Europe will be carried out in the following paragraphs. This will include PESTEL analysis, Moore’s theory in relation to this sector, qualitative opinions and perspectives of the experts of the industry, systems diagram and scenario development to examine the changes that might take place in the sector over a period of time.

2.1.2 Pestel Analysis

Political Environment – For the past some years, the procedure of looking out for alternate source of energy has not been restricted to just environmental and economic concern. In fact it has grown to become a security concern for the entire continent. The European Commission is placing a strong emphasis on this energy issue and is faced with the mission of lessening the dependency on foreign oil and petroleum from unsteady parts of the world (Corporate sustainability: How stakeholder management is engendering environmental consciousness, 2002). As the prices of the gas are at an all time high, there is a dire need for change. Currently, the dependency on petroleum based automobiles is 94%. Thus, the European Union has set new policies and rules for the car manufacturers. It is instructing them to manufacture pollution free and more energy efficient cars. This will compel the automakers to switch over to the production of eco or hybrid cars. Hence, it can be said that political framework of the entire continent provides good opportunities to this industry (Dennis, Wixom and Roth, 2008).

Economical Environment – The economic factors can be considered as one of the main drivers for the increasing popularity and use of eco cars. As there are not many oil reserves in Europe, the continent has to import it from other nations. This practice takes the money away from people’s disposable incomes (Fuxman, 1999). It results in smaller business investments and lesser expenditure on retail shopping. As a consequence of this, the GDP of all nations will suffer badly. Therefore, due to the high fuel efficiency feature of the hybrid cars, the dependence of European Union’s member states will be reduces and this will enable increased money circulation in the economy (Greenwood and et.al., 2009).

Social Environment – The benefits brought by a hybrid car are more than that of a non-hybrid automotive. This feature is increasingly attracting more and more towards this trend. The social factors encompass concern for health and safety. The masses are becoming progressively conscious about the environment (Hamzaoui and Merunka, 2006). The main drawback of petrol and diesel cars is the amount contributed by them to the air pollution. The impending health problems from the pollution are already raising the eyebrows of people. Therefore, there is greater demand for hybrid cars these days as customers are shifting from conventional cars. However, these cars are costlier and the performance is not as good as the fuel based cars as of now (Jonk, Handschuh and Niewiem, 2008).

Technological Environment – Going by the history of the history of the automotive industry, the cars reflect an evolution. Engines that first started with steam fittings have now evolved into gasoline and electrical. When the gasoline and electrical cars were first introduced they were of inconvenience for the users (Kumar and Yamaoka, 2007). However, gradually with several refinements and advancements, they are now used world over. Novel ideas for innovation in automotives regularly need to be pioneered so that more safer and efficient vehicles are launched. Hence, hybrid cars fit in this context. Considerable amount of fuel will be saved with help of hybrid technology. This will also result in safeguarding the environment. Hence, the future holds good for this segment (Luo and Zhang, 2012).

Legal Environment – Legal regulations are mainly concerned with the protection of the people of the society. There was a case hearing in which it was argued that the electrical motor in hybrid cars is capable of causing accidents (Olson and Thjømøe, 2010). People who are sight impaired are more vulnerable to this as they normally depend on hearing the sound of an approaching car or vehicle. Though all agencies are concerned about the environmental impact of pollution, there is very less concern for the implications of less sound emissions. Therefore, the problems due to hybrid car’s no sound producing electrical motor are not regulated and no protection is given to the public (Ombach, 2012).

Environmental factors – Though low sound emissions are a legal problem but from environmental standpoint it contributes greatly to reducing sound pollution. Its electrical motor produces almost no sound while the fuel operated vehicles generate large amount of noise (). In addition to this, they also consume lesser oil as compared to their fuel based counterparts. Therefore, they do not emit carbon dioxide, carbon monoxide and other hydrocarbons. As per an environmental report, around 19 pounds of CO2 is released every time one gallon of gasoline is used by a car. The most apparent implications of such emissions is global warming. Hence, from this point of view, hybrid cars stand to win (Rieg, 2010).