The objectives of this paper are to investigate and identify the factors and rationales that move Toyota onto hybrid vehicle production. PESTLE analysis is used to analyze the collected secondary data. According to PESTLE analysis, there are several reasons that affect Toyota to produce hybrid car. Based on the PESTLE analysis, all the factors are reasonable to support Toyota move to hybrid vehicle production. Researchers have invented some alternative energy technology like the electric car.
Despite to its disadvantages where the electric car was found that it was unable to carry out long distance driving and the problem regarding the frequent recharges issue. Thus, the hybrid electric car technology is actually combine he benefits of both conventional fuel powered car and electric car. But, there will involve large amount of money in order to invent and develop a new technology. So, what are the rationales that move automakers, such as Toyota to into hybrid vehicle production?
Key word-Toyota, hybrid car, PESTLE analysis 1. Introduction In the last couple of years, automotive industry was coming up with great innovations nowadays in order to fulfill the demand of the market . The most recent innovation was mainly focus on the aspect of environmental and energy utilization issues. Therefore, hybrid car has been introduced. Hybrid car technology is type of technologies that made the vehicle utilize at least two different power sources in order to move the car.
In general, the hybrid car type which available in the market is hybrid electric vehicles (Have) such as Toyota Pries Hybrid and Honda Civic Hybrid. A HAVE is using the combination of the internal combustion engine with electrical motors to make the vehicle move. Its dual engine characteristic will improve the fuel efficiency and even help in increasing the performance of the vehicle. However, the conventional cars run on a single fuel resource namely gasoline, petrol and diesel.
Due to the rising issues regarding the shortage of the natural resource in world-wide recently, the conventional cars are not longer to meet for the future demand. In fact, The research objective of this paper is to investigate the rationales that move Toyota into hybrid vehicle production and to identify its related factors by using PESTLE analysts. 2. Literature Review PESTLE analysis is a structure for planning, presenting, and report writing, it is also an analytical tool to consider external factors and help in the analysis of the impacts.
Basically, PESTLE is mainly used to identify and summarize environmental influences on an organization to help it assess actual and future strategic contexts . Besides that, it is also a useful tool for understanding the external macro environment in which involved. PESTLE helps organization adapt proactively to ever changing environment and allows forward thinking so that issues are anticipated in advance . Moreover, PESTLE analysis can help to take advantages of the opportunities and minimize the threats. PESTLE can help to avoid strategies that may be doomed to failure for reasons beyond control.
A recent study which conducted by Serializations 1) regarding the use of strategic management lolls which included PESTLE among the group of tools that were most widely used by practitioners in the world of business. Although the authors comment that given its relatively high current use (47% of respondents usage or have used this tool) it is, at the same time, considered a statistical outlier in that 30% of respondents claiming unawareness . 2. 1 political Factors may be altered by the government’s influence on a country infrastructure.
Factors include the current and potential influences from political pressures and hence, the stability of the industry
Another environmental effect of a project is on the community that surrounds it 3. Methodology 2. 2 Economic Factors include local, national and world economic impact. Rates of economic growth, unemployment and interest rates will affect the spending power of nonusers and businesses which bring the impact on the nature of competition in an industry. Other important economic factors relate to the supply of and demand for key inputs, such as oil, metals, minerals, and skilled labor. 2. 3 social Factors include the ways in which changes in society affect the project.
The growing consumer assertiveness and intolerance of poor quality are the social factors. The increasing of average household income with corresponding reduction in the time available to spent it. The other social factor is cultural aspects, health and safety consciousness, population growth rate, age strutting. 2. 4 Technological Factors include how new and emerging technology affects our project / organization. The technological factors are including maturity of technology, competing technological developments, research funding, technology legislation, and new discoveries.
The information technology, internet, global and local communications can be easily access by user nowadays. 2. 5 Legal Factors include how local, national and global legislation affects the project. All the organizations have adjusted their products and ways of operation to the different regulatory and legislative frameworks that an govern their product areas and countries in which they are active. 2. 6 Environmental Factors include local, national and global environmental issues. The general environment problem such as global warming and pollution are the environmental factor in PESTLE analysis.
The concern Figure 1: Proposed Research Process in Flow Chart First of all, we need to define the research problem. This will help us to determine the objective of the research. Once the project was defined, the research will proceed to review the concept and theories of the study. In this stage, the research will undertake extensive literature review from published Journal, article, books, conference proceeding, and government reports because the validity of data collected are strong enough to make this research strong and firm.
Besides that, in the secondary data collection, the data was collected from published work on website, newspaper, corporate profiles or official statistics. These data collected must ensure the validity before refer and take information from the website because some of the websites are invalid such as flogger and Wisped. Thus, it is wise to begin any research activity with a review of the secondary data . After data was collected, the analysis was begun. In this study, the method of analysis used was PESTLE analysis. The results were then interpreted and written in report form. . Discussion and Analysis In this section, we will discuss each of the factors, PESTLE accordingly. 4. 1 Political Factor In the last few years, the process of searching for the alternative energy source is not only restricting to the economic and environment concern. However, it also 2 consider as a national security concern. At 2007, the ex-president of United State, Bush, stated that “Union was largely focused on the energy issue, and the session the U. S. Government faces is how to lessen our dependence on foreign petroleum from unstable region of the world. With gas prices at an all-time high at the price of $3. 07 a gallon, which will be surpassed in upcoming years, we see the need for change, yet it is hard to plan out how to be free from our dependence when 97% of all energy consumed by vehicles is petroleum based . Vehicles. Specifically, the Air Resources Board mandated that at least 2 percent, 5 percent and 10 percent of new car sales be zero-emitting by 1998, 2001 and 2003 respectively . Besides, current CAVE aerogram will reward automakers who have significant contribution in production of the vehicles that incorporate better performance.
The credit system of the CAVE was formed to reward automaker and to provide automakers more flexibility to produce difference type of vehicle that fulfill the requirement of CAVE . However, the present president of U. S. , President Obama stated that he wants to end the America’s addiction to foreign oil and reduce the government’s focus on how to obtain oil from foreign countries . By driving hybrid vehicle, everyone can contribute on reducing the burden of government and reliance on foreign country. Another Act affect the political factor is Corporate Average Fuel Economy (CAFEГ?) standard that also executed in U.
S.. Since 1975, the U. S. Government has executed CAFEГ? policy in order to reduce the greenhouse gases emission and oil consumption, following the 1973. -1974 oil crisis. CAFEГ? did influence the decision of automotive firm by setting a minimum standard for the average fuel economy of a manufacturer’s fleet of vehicles sold in U. S. . Thus, in order to fulfill the standard of CAFEГ?, the automaker has change a particular vehicle model’s characteristic to increase its fuel economy, such as reduce the power, design the engine or transmission and reduces the weigh .
Thus, hybrid car is one of the technologies developed in order to fulfill the standard of CAFEГ?. On 26th January 2009, President Obama has started to reverse the climate policies of Bush administration and has set new rules to force all of the automakers in U. S. To produce more efficient and pollution free vehicle. This new rule will force manufacturers of car to make the switch over to hybrid vehicle production In addition, the U. S. Congress on 3rd October 2008 enacted a law which offers up to $7,500 in tax incentives for passenger plug-in car. This will help most of the buyer to reduce the initial cost when purchase a hybrid vehicle.
Moreover, there are large possibilities that those incentives will included conversion of gas vehicles to plug-in/hybrid vehicles, meaning that people able to convert his or her current vehicle into hybrid. There are some policy has been executed by government has grad interest of Toyota to move into hybrid production. Energy policy act of 1992 is an act that focuses on encouragement of divestment in conservation and energy efficiency by electric utilities . The fuel uses as a means for the Energy policy program to helping U. S. O reduce its dependence on important petroleum.
In addition, it also provide more flexible way for fleet operator who already are burdened with the responsibility of complying with the requirement of this act by rearrange the existing incentives and requirement program to directly award the use of alternative fuel . Besides that, the Californians Zero Emission Vehicle (CAVE) program also is one of the policies that do help to move Toyota into hybrid vehicle production. CAVE embarked in a plan to reduce vehicle emissions to zero through the gradual introduction of zero emission The Energy Policy Act of 2005 was signed into law by
President Bush on August, 2005. In this act, there is a section for individual that purchase or lease hybrid vehicles or other alternative motor vehicle state that the tax credit for hybrid vehicles, which was enacted by the Energy Policy Act of 2005, may be as much as $3,400 for those who purchase the most fuel-efficient passenger vehicles and light trucks[1 5]. In order to improve and encourage the production of hybrid vehicle, there were some policies executed by the U. S. Government as the extension of the Energy Policy Act of 2005, such as Energy Independence and Security Act 2007, Energy and Improvement and
Extension Act of 2008 and Recovery and Reinvestment Act of 4. 2 Economic Factor In our opinion, economic might be the main issue drive Toyota into hybrid vehicle production. In fact, a nation imports more products from foreign countries; it will lead to the more trade debt of nation. Therefore, the more Toyota Campy Hybrid was sold in the U. S. , the more trade debt was make by U. S. And directly affect the economics of U. S. Based on the price of the oil is keeps increasing in the global market situation, it takes money away from the disposable 3 income. This will lead to less retail spending and small business investment.
This situation will bring greatly negative effect on the nation’s gross domestic product. We conclude that because of the characteristic of high fuel efficiency of hybrid vehicle, the dependence of the country or even a family will be reduced, and thus more money is available in circulation of the economy. Besides that, automobile emissions contribute significant amounts of carbon dioxide to the atmosphere, which will lead to global warming. Hybrids could help in the effort of increasing fuel efficiency and thus lowering emissions. The economic effect of a warming planet has two phases: mitigation costs and adaptation costs.
Based on the Cambridge dictionary, adaptation means the process of changing to suit the different condition. The adaptation costs include those cost that let human survive during the arrival of disaster, such the relocation of coastal population, decreased agricultural production, water shortages and increased defense spending as global changes cause unrest and conflict. In addition, based on Oxford dictionary, mitigation means the action of reducing the severity, seriousness, or painfulness of something: the identification and mitigation of pollution.
The mitigation cost includes those issues that related activities that tend to reverse or halt the problem and lead to the needed to invest in new clean energy technologies development, the overall energy prices could be raised by a tax of carbon emission and lead to slower gross domestic product growth due to the increase of difficulties to obtain a clean energy resources where it requires a huge sum of money . In our opinion, due to the benefit of hybrid vehicles, both mitigation cost and adaptation cost can be reduced and result in positive effect on economic of a nation.
Hybrid vehicle believe to bring benefit to the nation trade. According to RCA, a Chicago-based economic insulting company, the oil rose to $120 per barrel, making oil responsible for 75% of the U. S. Trade deficit in 2008 . This situation might lead to trade imbalance. Trade imbalance might occur if the dependence of a country have import excessive amount of oil, it was caused by domestic supplies have peaked. Thus, any products and any technologies (hybrid vehicle) that will help in reduce in oil import of a country will resolve the problem of trade imbalance.
Based on the subsidies for environmental purposes, Honda developed a fuel-cell prototype and will start centralization around 2002. However, Toyota also darted to build hydro-car that need only water and Toyota Pries which is a hybrid-based car with an electrical and conventional engine that both reduce energy needs to less than 5 liters per 100 kilometers is already a big success in Japan. According to the Budget of the United States of 2000, there is a section named “Partnership for a New Generation of Vehicles”. This budget proposes $264 million, which is $24 more than in 1999, which is for investment in new generation vehicles.
This cost is used for three research goal, which are to develop advanced manufacturing technique; to use new technologies for near-term emission improvements; and o develop production prototype vehicles three times more fuel-efficient than conventional cars . According to the facts that mentioned above, hybrid vehicle is one of the solutions to solve all of these economic problems. So, this economic factor has attract Toyota to move into hybrid car production since it have great potential to solve economic problem that might facing by most of the country in future. . 3 Social factor In modern world, people who are attracted and interested in hybrid car progressively increase because it able to bring benefit in various aspects compare to non-hybrid car. The social factor has includes some issues like health and custom of nation. In our opinion, the main factor is air pollution. Formerly, the cars were run only by combustion engine and certain amount of unwanted gas (like nitrous oxides) was emitted from those cars and those emitted gases will cause serious air pollution.
After a long period, the pollution will cause some health’s problem, such as respiratory tract infection, skin disease, heart disease with high risk of complication, and others; at which the percentage of the problem will be increased progressively and may lead to fatal. This harass condition was settled by substituting hybrid car to the invitational car, because the combustion engine of hybrid car is less exposed to acceleration and burns fuel under more stable conditions, thus it emit less carbon dioxide (CO) than an engine of conventional flowered vehicle .
Besides that, the noise emission from electric motor (noise pollution) also is a main disadvantage of conventional fuel-powered vehicle. Hybrid car is a vehicle that can bring the comfortable and relax feeling for the consumer during driving because the engine of the car able to operate with less noise emission, reduce the noise no matter at high speed or low speed. On the