Title: Competition in the auto sector: the impact of the interface between supply and demand

Authors: D. Garel Rhys

Addresses: Centre for Automotive Industry Research, Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive, Cardiff CF10 3EU, UK

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.

Keywords: America; USA; United States; competition; consolidation; cost structures; economies of scale; Europe; European Union; globalisation; Japan; smaller firms; survival strategies; automobile industry; automotive industry; car industry; motor industry; marketing strategies; supply and demand; marketing–product supply interface.

DOI: 10.1504/IJATM.2005.008221

International Journal of Automotive Technology and Management, 2005 Vol.5 No.3, pp.261 - 283

Published online: 23 Nov 2005 *

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