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What are the main external influences acting on the business?

Many things might affect the way the business operates. Simple things like the World Cup in June 2006 can cause a dip in sales as people think about football rather than buying a new car. Ling noticed a spike in sales, however, in July. This might have been a delayed response to the World Cup - once it was over, people started to think more about the possibility of buying a new car.

The state of the economy is an obvious factor affecting sales of products like cars. If the economy is growing then both businesses and individuals are more willing to buy new cars. If unemployment is rising and the economy is shrinking, sales of cars are likely to be slower. However, because Ling's finance method allows customers to liquidise the value of their existing car (sell it) and rent a brand-new car with low outlay and low, fixed monthly rentals, a downturn in the economy has traditionally meant a surge in demand for this method of car acquisition for businesses. The customer sees a rise in their available cash. This has never been tested in the personal market, as since personal contract hire has been available, the economy has always been in a period of growth.

Ling's commitment to environmental awareness and unconventional marketing approach have made her business increasingly popular. It is all based around being open and honest with customers. Source: Lings Cars.

Cars have a relatively high income elasticity of demand. As such, they are very responsive to changes in incomes. That is why a growing economy and rising wages tends to lead to better sales for Ling.

Whilst people are thinking about the World Cup, they may not also be thinking about buying a new car! Copyright: Kiss Zoltán, from stock.xchng.

Because Ling's business is all about arranging finance for customers to buy cars, interest rates on the finance deals are an important part of the overall price that the customer eventually pays each month. If interest rates are rising then it makes it more difficult to persuade customers to take on loans for a car. This depends to a large extent on how large the rise in interest rates is and whether there are expectations that rates will continue to rise.

The growing concern over the environment is one factor that affects the motor industry. The government have been setting different rates of vehicle excise duty (car tax) on different vehicles depending on the level of emissions they produce and the fuel efficiency of the engines. There are growing pressures for the government to tax so-called 'gas guzzlers' more heavily than more fuel-efficient cars to try to change consumer behaviour. This could lead to a change in the demand for the types of cars that Ling offers for sale. Her customers already drive under agreed mileage constraints and have a clear, declared cost per excess mile. Along with her efficient sales method (no trips to dealerships, and very low environmental sales overheads compared to car dealerships), Ling claims her customers have the greenest environmental footprint in the UK.

In addition to this, there have been investigations into the possibility of introducing road pricing schemes in the UK in the coming years. A report published in December 2006 suggested that as much as £28 billion could be raised from making people pay for the use of the roads. If such a scheme were to come in, Ling might see a change in the demand for cars. Controversially, Ling supports road pricing or cost-per-mile motoring as "it focuses the mind of the driver and is the only way forward to reduce unnecessary journeys and congestion. Despite everyone's gut reation to dislike it, it is a GOOD THING in my view".

Ling actively promotes information for consumers on the environmental impact of the vehicles that they are interested in. Her efforts to contact relevant bodies in the car industry to try and obtain information about the environmental impact of the cars she sells as well as her own contribution has been widely praised.

Martin Callanan, a member of the European Parliament (MEP) for the North East, says of Ling's efforts:

In addition to this, Ling sets an example by working from home. This cuts down her travelling considerably - as Ling says:

"Personally, I do not commute. LINGsCARS office is a professionally converted dining-room in my house. Some companies (notably NETWORK) will not deal with me unless I increase overheads - financial and environmental - by opening a "real" office. Christopher Desplace, head of Network, said: "it is Network's policy for all franchisees to have separate business premises". Does anyone ever ask "why?"??? My decision means I only drive around 5,000 miles a year in total and reduce emissions and costs. Please note I have pioneered availability of environmental information on the internet."

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