External analysis of the automotive industry Cars play an important role in our lives. The car allows us to get around in less time than walking and also gives us more autonomy since we can go wherever we want. Having a car offers us convenience that public transportation cannot provide. Cars have a huge effect on our lives and we need to understand how the automotive industry impacts the economy. Furthermore, we must be aware of the external factors that influence the automotive industry. Knowing the environmental factors that influence the automotive industry allows us to make better decisions when purchasing a vehicle. The environmental factors we need to pay attention to include political, economic, technological, demographic, socio-cultural and global ones. (FMVSS) No. 208, Occupant Impact Protection.(2) The principal dynamic performance requirement in this standard requires successful crash testing of a test vehicle against a rigid barrier with both restrained and unrestrained adult dummies at any speeds up to and including 48 kilometers per hour (kph) or 30 miles per hour” (National Highway Traffic Safety Administration, 1997). The National Highway Traffic Safety Administration and the Environmental Protection Agency have taken steps to reduce greenhouse gas emissions from vehicles. The latest fuel economy standards are “protected to: cut 6 billion tons of greenhouse gases over the life of vehicles sold in model years 2012-2025; Save families more than $1.7 trillion in fuel costs; Reduce America's dependence on oil by more than 2 million barrels per day in 2025” (US EPA, 2015). Evidently, government intervention in the automotive industry determines how automakers produce and market their vehicles. The automotive industry is facing economic pressures as more and more automakers enter. The automotive industry will have to adapt to the changing preferences of the common citizen. More and more people are moving to cities near their workplace (Dawid, 2016). Younger people rely more on their smartphones. These are lifestyle trends that automakers will have to keep up with. Globalization enables a competitive automotive industry. It allowed cars to be “designed in one country and built from components originating in different countries by a company based in a third country” (Global Education, 2014). Globalization gives people more options to choose from, which in turn increases competition within the automotive industry. In fact, understanding how the automotive industry responds to external factors helps us drivers make better decisions when purchasing a new vehicle. This also helps us better predict where the future of the automotive industry is going. While fewer and fewer people will drive cars, technological innovations and an ever-growing population will certainly enable this industry to do so