Essays on External Analysis of Australias Automotive Industry Case Study

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The paper "External Analysis of Australia’ s Automotive Industry" is a perfect example of a business case study. The automobile industry in Australia is among the major driving forces in the economy with high profitability and high employment level comprising of 3 per cent of the total workforce. This paper is the analysis of the external forces affecting the Australian automobile industry using the PESTEL analysis. The major factors that have been looked into in detail are the political factors, economic, social-cultural, technological, environmental and legal factors affecting the automotive industry. Political The domestic automobile market in the country is relatively small.

Reliance on the international market is therefore indispensable. In the early 90s, the government introduced a policy that ensured a balance in the economy. It advocated for the protection of the natural resources, agriculture and manufacturing sectors through subsidies, tax breaks, import tariffs and duty exemptions to encourage exportation (Darby 2009, p. 461). This move however is bound to have its economic downside. Firstly, government interference distorts the operations of the free market. Secondly, the loss of consumer welfare and finally, a substantial amount of the resources and effort is directed into lobbying activates other than economic development. The industry transformed from protectionism trade policy to liberalization in the 80s.

This has enabled them to exploit the niche market and be competitive on a global level (Bracks 2008, p. 43). This opened the avenue for setting up of foreign firms into the country such as a U. S. based Ford plant. Following this, between 1997- 2007, the production and exportation of the vehicles and their components increased significantly up to $ 5.1 billion. The quality of the products also improved as a result of customers’ positive criticisms (DFAT 2008). The effect of this policy is still being felt to date as evidenced by the continuing upward trend of the exports.

In 2010, revenue from exports amounted to $ 3.6 billion which was a 15.5% increase from the year before (ASA 2012, p. 7).



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