The Modern Motor Industry: Nowhere for the inefficient to hide
Published: 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.