Global Team Assignment (gta)
Download 2.88 Mb.
|
- Navigate this page:
- Political Factor (339)
- Economical Factor (335)
- Socio-Cultural Factor (127)
- Technological Factor (324)
- Environmental Factor (247)
- Legal Factor (117)
PESTEL (49)There are forces of change that affect businesses that are beyond their control. The appropriate understanding of the big picture of the Political, Economic, Socio-Cultural, Technological, Legal and Environmental factors are key for a company to successfully take advantage of an ever-changing operational environment instead of opposing to it. Political Factor (339)In 1997 China signed the Kyoto Protocol in which China aim to reduce the greenhouse effect as a result of car emissions being one of the largest contributors of the greenhouse effect. Even China, as a developing country, is not obliged to give fixed targets. In addition there is a growing concern on the fast growth of the oil thirst / requirements of economic China. To deal with these issues the Chinese government started as of 2010 in five major cities (Shanghai, Shenzhen, Hangzhou, Hefei and Changchun) incentive programs for electric cars as a pilot. (Needs Non-Wik Ref) (see http://en.wikipedia.org/wiki/Government_incentives_for_plug-in_electric_vehicles#China )  Hu Zhaoguang, Vice President and the Chief Energy Specials at China State Grid, China’s largest utility company, stated, "Electric cars will grow fast in China because the government wants them to”. The head of GM China group, Kevin Wale, shares the same opinion that the Chinese government is supporting electric vehicles technology more than any other country on earth[Bri10]. The booming on Chinese auto industry coupled with the potential oil scarcity and the climbing pollution levels in the country are some key drivers for the government proposing stimulus measures for the auto industry[Liu11].
The Chinese Automotive Industry Plan is a strong political commitment that aims to create capacity to produce 500,000 new energy vehicles by 2015 and a cumulative five million units by 2020. The goal is to increase sales of such new-energy cars to account for about 5% of China’s passenger vehicle sales[Gre12]. In order to achieve that target, government incentives has been provided for green-car purchases, reaching almost a third of some car’s listed retail price[Joa13]. The money is already flowing, with roughly $17 billion funds for R&D and the installation of charging stations as well many provincial governments offering automakers cheap land and consumer additional subsidies. For example, Beijing and Shanghai’s municipal authorities included BYD auto cars (E6 and BAIC Motor models) under government subsidies of as much as $8,800 to encourage the use of new energy cars[Xin14].
Economical Factor (335)The 2003-2008 energy crises imposed a quite challenge for the expansion of the automotive industry mainly because of the high increases in petro fuel prices. The same slowdown was not perceived by the electric auto industry that oppositely was benefited by a strong increasing demand for new energy powered vehicles. Another important event shaping the economic environment is the fact that since 2009, China became the world’s largest automaker and automobile market, surpassing U.S. and Japan, representing a great opportunity any car company to develop. China additionally that as part of its five-year plan (2011-2015) a target become the most innovative country, providing enough economical helping to its car industry to take the lead in electric cars industry[Bri10]. The strong external oil dependencies in China, where the country imports about two-thirds of its oil, also plays an important role on the economic environment of the country, as the consequence is an expensive cost of the gasoline, about $4 a gallon, especially for a country with a low-income per capita income of just $2,800 a year[Bri10]. Skyrocketing price increases on a Chinese car fleet can impose a much higher pressure on the oil price because of the increase in demand. For Oliver Hazimeh, a partner at consulting firm PRTM, “It most likely will be cheaper for China to subsidize the cost of electric-car batteries than to secure the oil supply." (Need Reference Here) As the worlds second largest economy, China needs to establish a more sustainable energy matrix for supporting its development. As a sound commitment to that, the goal of the China’s 12th Five-Year Plan for Economic and Social Development (2011-2015) is to have 21.6% of the country’s total energy demand sourced from renewable energy by 2020[KPM11]. This strategic plan means a huge opportunity for investments and the development of new technologies as for the electric vehicles. According to United Nations report, in 2011 China was responsible for almost one-fifth of total global investments in renewable energy investments ($52 billion) [Jac12]. Socio-Cultural Factor (127)Various international crises have influenced some important changes in social trends, as making people more favor in vehicles with lower and cheaper energy consumption. Especially in China where the cost of the gasoline is expensive and the pollution is heavily affecting the biggest cities, making urban Chinese more concerned with climate change and willing to use ecological products[Bri10]. Despite an improving new energy government programs, public opinion and feelings toward electric vehicles in China are not yet formed: only one in five (20%) are open to considering them for purchase[Dav13]. For the BYDs general manager of Asia-Pacific auto sales, “the use of electric vehicles in public transport is the first step and a more realistic way to promote and popularize the products"[Joa13]. Technological Factor (324)The biggest drawback of electric vehicles is the operating range of the vehicle; related to its primary limited source of energy, the battery. The lithium-ion batteries are a strategic technology for electric cars and the Chinese automakers have a competitive advantage its production. The expertise comes since the 1980s when the U.S. moved electronics manufacturing to Asia. Intel estimates that today in China around 33,200 people work in lithium-battery production, against just 1,100 in the U.S., allowing Chinese companies like BYD to make some of the cheapest car batteries in the world[Bri10]. A key element for the manufacture of advanced electric motors and battery system is dysprosium, a rare earth element with a metallic silver luster. An around 99% of the total worldwide production of this rare material comes, like any other rare material, from China[Wik1410]. Another important technological change is regarding viable recharging options for electric vehicles. The CNOOC Chinese oil company is exploring battery-swapping stations, where clients drive in, drop off their depleted battery, and drive off with a fresh one in less than a minute. A startup company called "Better Place" has successfully built a battery-swapping station infrastructure in Israel and Denmark, offering the possibility to handle five different brands of battery, showing that different suppliers would not be a limitation. According to Shai Agassi, Better Place CEO, “China is the perfect place for swappable batteries because most urbanites live in high-rises without easy access to charging stations”, besides that this solution would avoid adding strain to the grid as big cities would like the Chinese would face[Bri10]. According to Bill Russo, a senior adviser at Booz & Co., the Chinese are trailing in the development of internal-combustion engines and aiming to become a dominant global purveyor of battery-powered vehicles technology[Bri10]. Aligned to that, BYD Auto has been a leading Chinese company on this sector, becoming the first company to produce purely electric vehicles in the world.
Environmental Factor (247)The Chinese motivation for going electric is driven by some other factors than just the desire for a green agenda. The World Bank estimates that 16 of the 20 most polluted cities in the world are in China[The07], putting the environment as an important and hard-to-ignore issue. Electric vehicles could help the Chinese cities to alleviate the smog that chokes China's traffic-clogged streets, and slightly lower greenhouse-gas emissions than gasoline cars even if the electricity that powers them come from dirty fossil fuels1[Bri10]. Example; during the 2008 Olympic Games the local government of Beijing had restricted the use of automobiles during the Olympics, especially the use of government cars that resulted in a significant reduction of the air pollution. Another fundamental reason is that China need to solve its severe oil addition: with more than 19% of the world population, the country has just less than 1.5% of the world oil reserves in 2013, importing about two-thirds of its oil[Wik149]. Several governments have being looking for investment opportunities the electric vehicle industry for their public transportation system. Many local transportation authorities, such as in Shenzhen, Changsha, Xi’an, Tianjin, California, São Paulo, and other ones in Spain, Canada, Colombia and U.K, have being looking for newer, cleaner and more efficient propulsion technologies, with lower operating-cost, implementing pilots to test electric buses[4Tr14][Blo141][Nic14], creating several target export markets for BYD. Legal Factor (117)A low emission agenda has been parts of many global environmental legislation around the world: More and more countries have been approving more strict legislations on emission of automobiles The European Union have issue emissions legislations since 1994 President Obama announced in 2009 a national fuel efficiency policy: all new cars and trucks sold in U.S. need to increase fuel economy and reduce greenhouse gas pollution Due to the severe pollution occurred in Beijing and the major first-tier cities in China, the Chinese government has promulgated new regulations to restrict the volumes of the cars and to impose rigid liability against the drivers and car manufacturers if the emission is not in compliance with the government standard. Download 2.88 Mb. Share with your friends:
|