The term "environmental factors" refers to elements outside the industry which nonetheless are crucial to the profitability of the industry.
First, the automobile industry is dependent on massive infrastructure, including investment in roads and the existence of a network of fuel stations. If countries decide to invest more in public transit and disinvest in road networks, then people will buy fewer cars.
Next, the most profitable cars tend to be inefficient, large luxury vehicles. Sales of these types of cars are highly dependent on fuel prices. When fuel prices skyrocket, the desire for fuel-inefficient cars decreases dramatically.
Also, the general business environment affects car sales. Rises in interest rates or economic downturns can reduce sales. Currency fluctuations can also affect costs and sales.
Additionally, car companies have attempted to reduce the cost of labor and manufacturing through the use of global supply chains. However, these supply chains leave companies vulnerable to rising wages in the developing world, political unrest, tariffs, and fluctuations in global shipping costs.
Finally, car companies are vulnerable to lifestyle changes, including the sharing economy, which leads to people buying fewer cars. There seems to be a generational shift in progress, in which people are foregoing car ownership and are instead using forms of technologically mediated on-demand access to transportation, such as ride-sharing apps.