1
Volkswagen Group PEST Analysis
Maseno University
ECO 401
, 2
Volkswagen Group PEST Analysis
Among the largest motor vehicle producing company is Volkswagen Group. Volkswagen
Group has a market share of over 7%, ranking second after Toyota Company. In the recent past,
Volkswagen Group have enjoyed growth in its revenue (Volkswagen 2020). Normally, during
the growth of the company, there are severally challenges that faces the company. External
environmental factors are among the significant aspects that affects the operations and the
success of the business. These factors include Political factors, economical factors, social factors,
and technological factors.
Political Factors
Political factors in PEST describes the government intervention in the economy, that can
either promote, or discourage business operations. Political stability is a key issue that fosters
business growth. The business operations of Volkswagen Group have been influenced by various
political factors (Sammut‐Bonnici & Galea 2015). For instance, there are policies in most of the
European countries that seeks to reduce the environment pollution. One of the action plan is to
reduce the production and usage of fossil fuel-consuming motor vehicles. For instance, the UK
seeks to do away with fossil fuel-consuming vehicles by 2040. Therefore, the market of
Volkswagen vehicles will significantly reduce in this region. However, to navigate this policies,
Volkswagen is considering investing in production of electric and hybrid cars. Additionally,
Volkswagen Group has been affected by sanctions placed by the US government, which is aimed
at reducing importation of vehicles from EU nations.
Economic Factors
Economic factors in PEST analysis entails factors that affect the economy of the country.
These factors include taxes, wages, and incentives or any other government monetary policies
Volkswagen Group PEST Analysis
Maseno University
ECO 401
, 2
Volkswagen Group PEST Analysis
Among the largest motor vehicle producing company is Volkswagen Group. Volkswagen
Group has a market share of over 7%, ranking second after Toyota Company. In the recent past,
Volkswagen Group have enjoyed growth in its revenue (Volkswagen 2020). Normally, during
the growth of the company, there are severally challenges that faces the company. External
environmental factors are among the significant aspects that affects the operations and the
success of the business. These factors include Political factors, economical factors, social factors,
and technological factors.
Political Factors
Political factors in PEST describes the government intervention in the economy, that can
either promote, or discourage business operations. Political stability is a key issue that fosters
business growth. The business operations of Volkswagen Group have been influenced by various
political factors (Sammut‐Bonnici & Galea 2015). For instance, there are policies in most of the
European countries that seeks to reduce the environment pollution. One of the action plan is to
reduce the production and usage of fossil fuel-consuming motor vehicles. For instance, the UK
seeks to do away with fossil fuel-consuming vehicles by 2040. Therefore, the market of
Volkswagen vehicles will significantly reduce in this region. However, to navigate this policies,
Volkswagen is considering investing in production of electric and hybrid cars. Additionally,
Volkswagen Group has been affected by sanctions placed by the US government, which is aimed
at reducing importation of vehicles from EU nations.
Economic Factors
Economic factors in PEST analysis entails factors that affect the economy of the country.
These factors include taxes, wages, and incentives or any other government monetary policies
