PESTLE Analysis of Automobile Industry

Pestle analysis of automobile industry. The automotive or automobile industry comprises vehicles, cars, bikes, and public transport. It’s the world’s largest industry in terms of revenue and profit.

Cars and vehicles have become an essential part of our lives nowadays. They serve us not only in terms of mode of transportation. In fact, they add value to our lives with every ride we take. Most importantly, the automobile industry knows its significance and impact on the society and economy.

Some of the top brands in the automotive industry are Chrysler Automobiles, FIAT, BMW, SAIC, Nissan, HondaTesla, Ford, Hyundai, Daimler, Volkswagen, and Toyota.

Today, we’ll discuss the pestle analysis of the automobile industry. It’s going to analyze the macro-environmental factors impacting the world’s largest industry. For internal factors, check out the swot analysis of automobile industry. Here’s the pestle analysis of automobile as follows;

Political Factors Affecting the Automobile Industry 

Carbon Emission Regulations

Politicians have realized the growing environmental concern of the public. They’re now exploiting the opportunity by introducing new carbon emission environmental regulations to address the public concern.

However, a vast number of public transport, motorbikes, vehicles, cars, and other modes of transportation still rely on diesel and petrol as their main source worldwide. They cause air pollution when vehicles burn and emit carbon out into the atmosphere.

Government officials and politicians are showing great interest in the statistics of the amount of carbon being emitted into the atmosphere. Once they introduce some environmental regulation, then the automotive companies would have to go through the environmental legalities.

Safety Policies

If a vehicle fails due to faulty equipment or some tech issues, it could endanger a person’s life. That’s why various governments have implemented strict vehicle safety regulations in the automobile industry.

The safety regulations and policies aren’t only for the automotive manufacturers. Drivers should also follow the regulations like driving within the speed limit and fastening the seat belt. Such policies and regulations make it difficult for companies to launch a new feature by keeping in mind the safety protocol.

Economical Factors Impacting Automobile Industry 

Economic Recession

The most devastating impact of the pandemic is the worldwide economic recession, increasing unemployment rate, and lower buying power. Such economic factors decreased the sales of automotive companies.

Emerging Economies

The market in developing countries like ChinaMalaysiaIndonesiaIndiaBrazilMexicoSingapore, and others is serving the automobile industry in two ways. First, it’s providing cheap labor and lower production cost. Secondly, they have a vast consumer market with a lot of growth potential. That’s why multinational automotive brands are relocating their manufacturing and production units in Asian countries to exploit both opportunities.

Social Factors Affecting Automobile Industry 

Driving Trend

The customer market still has the fascination to own the latest model of the car. The internal desire motivates them to buy one or more vehicles for themselves. People do it in advanced countries like Canada, the USA, UK, Australia, France, Germany, and others.

The automobile companies know the shopping trends, lifestyle of people, and customer attraction features. They target the customers accordingly. Most importantly, such trends have increased the growth, sales, and revenue of the industry.

Technological Factors Impacting Automobile Industry 

Safe Transport

Automobile companies have been working on safety measures to make transport safe and secure. They added safety features like airbags, seatbelts, brakes, and others over the years. They’re now using the technology to keep on updating the safety measures.

Autonomous Technology

Technological development and AI have made it possible for automobile companies like Tesla, BMW, and Toyota to launch self-driving autonomous vehicles in the market. They’re now working to make the technology more efficient. Like more battery timing, safe, self-sustainable, solar, and wind technology. The addition of these features would change the mode of transportation.

Legal Factors Affecting the Automobile Industry 


The IPR (intellectual property rights) is a common issue in the automobile industry. Different automotive brands file patent, design, trademark, and copyright lawsuits on other brands to protect their interests.  

Environmental Factors Impacting Automobile Industry 


The automobile industry has two major environmental issues; air pollution and carbon emissions. They’re directly and indirectly impacting all of us in terms of low-quality air to breathe in, climate change, and global warming. That’s why automobile companies are moving towards electric vehicles to address environmental concerns.

Conclusion: Automobile Industry Pestle Analysis Example Company

After a careful study of the pestle analysis of the automobile industry, we have concluded that the automobile industry is indeed the world’s largest industry. Environmental issues, government regulations, and economic recession are some of the main challenges. Automobile companies should focus on the development of electric and sustainable technology to address environmental issues; while paying heed on the external political, economical, social, technological, legal, and environmental factors impacting the company.

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