Competition in the auto sector: the impact of the interface between supply and demand Online publication date: Wed, 23-Nov-2005
by D. Garel Rhys
International Journal of Automotive Technology and Management (IJATM), Vol. 5, No. 3, 2005
Abstract: In the last 20 years, so much has been written about the supply side of the motor industry; the need to reduce costs through supply change management, design for manufacture, the appropriate level of investment, and the correct systems to make best use of these features. However, this is only part of what is needed for a successful enterprise. In short, lean production and supply side factors may be a necessary condition for the establishment of a successful enterprise in the automotive industry, but the sufficient condition needs the addition of appropriate scale and on the demand side of the equation, the manufacture of products that the consumer wants. If a car company is able to use this and produce products that the market really wants then it can make profits whatever the market throws at it, and use price and non-price competition to their advantage. The current motor industry consists of very large specialist firms and huge mass producers. In short, successful marketing needs appropriate supply conditions.
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