World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data
The Modern Motor Industry
Garel Rhys
World Economics, March 2001

The motor industry is experiencing one of its periods of massive change. This involves considerable micro- and macroeconomic effects, reflecting the structure and behaviour of the industry and its scale of operations within an economy. The industry is a highly rivalrous oligopoly, where although there is product differentiation, competition, both price and non-price, is considerable. This impacts upon the nature of vehicle demand, including environmental issues. Supply conditions in the industry generate interesting data on short-run and long-run economies of scale issues. The analysis is on a global basis, where new manufacturing centres are appearing. Continued consolidation has occurred and this affects the UK which is representative of most auto making centres in that enterprises are controlled by foreign owned multinationals.
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