PEST Analysis
The PEST model aims to examine the external environment of Nissan, which in this case is the automobile industry. We will particularly expand on the political, economic, social and technological aspects. The political environment of the automobile industry encompasses government regulations such as corporate tax and international trade regulations. Worldwide, cars are subjected to corporate tax by the government of approximately 6%. For instance, in Mexico, it is 6.25% (Internal Revenue Service). If the government alters these taxes, it would directly affect the cost of Nissan’s vehicles and thus affect demand of those specific countries. Furthermore, governments impose international trade regulations on imports so to keep their deficit in control (imports – exports). Not all automobile companies have a manufacturing plant in the country they sell to. For example, the US government taxed the US customers with a ‘chicken tax’ of 25% on all Nissan vehicles before the manufacturing plants opened in Smyrna, Canton and Decherd. Even though Nissan has a wide dispersion of manufacturing plants: 36 in 19 countries, it sells its cars to a total of 123 countries.

This clearly depicts that Nissan exports to a lot more countries than it manufactures in thus concluding that a change in foreign trade regulations will also along with corporate tax greatly impact Nissan’s demand and revenue. Moving on to the Economic aspect of the automobile industry, we examined the trends in developed countries and developing countries, cost of fuel, exchange rate risk and the business cycle (recession). For the automobile industry, economic growth has moved from traditionally strong western companies such as the United States and West Europe to other parts of the globe especially East and Southeast Asia, South America and Africa (Trading Economics). As we have seen, Nissan