The automotive or motor vehicle market continues to expand worldwide with the introduction of new cars and the significant addition of more customers; and the UK market is no exception to this. With the development of advanced technologies and fuel-efficient mechanizations, companies operating on the UK motor vehicle market are making the most of their appeal to customers. In addition, certain external factors have an impact on the way the UK motor market and the companies operate. The UK motor market is controlled by macro-environmental factors, which are not in the control of companies, and also by micro-environmental factors, which can usually be controlled by companies. Both these macro and micro influences can be gathered and evaluated in detail through certain analytical tools. Thus, this report will first carry out a STEEPLE analysis of the UK car market, assessing aspects that are important to car manufacturing organisations. The report will then focus on the microeconomic environment, discuss the UK motor market from the point of view of product, labour and competition, and finally conclude with examples of how HRM is practised in car manufacturing organisations in line with these macro and micro aspects.
When viewed from socio-cultural perspective, cars and other forms of automobiles in the UK market are maximally seen as status symbols and as products that will boosts ones image. That is the reason why the customers are willing to pay huge sums for particular brands. Although, all cars are for transportation, certain brands will have a high price tag, due to their power, efficiency features, technology and importantly their brand name. However, due to slowdown in economic growth, many people “are waking up to the fact that owning” a costly branded car is “not the status symbol that it was once perceived to be.” (Milmo 2011). So, people are not buying cars particularly high branded cars that frequently, and this socio-cultural aspect could also be one of the reasons, why UK car sales fell for the 13th consecutive month. (Milmo 2011).
Updating and incorporating new and efficient technologies is a key aspect of car manufacturing. The consumers all over the world including UK are not only demanding a lot of features and comfortable ride, but importantly fuel efficiency. So, the automobile companies are investing and have to keep on investing heavily in R&D, particularly for the development of fuel efficient options. If this trend continues, it is expected that by 2015, 25% of the vehicles will be high technology cars like Hybrids and cars that run on alternate fuels (Frost and Sullivan 2010). The figure below clearly shows that America and European countries including UK will be the major drivers behind it.
Fig 1: (Frost and Sullivan 2010).