IMPACT OF PEST ON AUTOMOBILE INDUSTRY

POLITICAL FACTORS

Political stability is the factor which plays a vital role in constructing or destructing the industries. China, Japan, India, and America all countries have stability in their politics which is actually promoting their automobile industries.

Automobile companies taking advantage of tax incentives and subsidies which governments are providing for example every big company is planning and ready to open in India and China why because of their government strict policies regarding the welfare of companies and subsidies which they are providing to manufactures like in China has given opportunity to work with utilities expense free manufacturing like they only need to have produce and so they can also produce on minimum cost so to compete in the market.

U.S. trade officials have negotiated trade agreements such as the Memorandum of Understanding with Korea (1993), the North American Free Trade Agreement (NAFTA, 1994), and the U.S.-Japan Automotive Framework Agreement (1995). These and other agreements have increased automobile and other exports to Japan, Mexico, and Korea.

All the big government is showing positive attitudes toward expanding the business and that is how the mergers of big names such GMC with Chrysler and Porsche with Volkswagen are taking place.

In Korea the whole transport industry is occupied by India Tata motors and it become possible because of the policy of Korean government that they wanted quality service from any country.

Some countries imposes high tax on export-import of automobile product which increases the price in domestic market like in Pakistan because of unfavorable policy regarding import of the car the price in domestic market is high.