The automotive industry reflects a monopolistic competition. Each firm within the car market (Toyota, Audi, Honda, etc.) sells different cars and compete with each other for market dominance. Japanese, German and American automakers mainly dominate the automotive industry today.
Factors contributing to the car market being so monopolistically competitive include the fact that there are many firms within the market and there are automakers worldwide. By incorporating quality and brand reputation, automakers distinguish their specific cars from others. Also, there are few barriers to entry and exit in this market, therefore new automakers often appear and old ones leave in the same fashion. Car firms have some control regarding the overall price of their products, yet no company has complete dominance over the car market.
There are several qualities to take into consideration when you break apart a car. First is reliability, you want to ensure that what you drive will not break down in its first week on the roads. Second is style, aesthetically pleasing cars attract a wider audience and make your vehicle look better than your competitors. Third is fuel efficiency, the more efficient your car is as opposed to your competitors, the more you will attract an audience o those willing to sane money. Finally, price is a big factor taken into consideration when someone is willing to buy a car. The car with the best price package will attract the most customers.
How car firms use advertising to promote their product is important as well. Good advertising can highlight the best features of your vehicle while also making it look superior to your competitor's car.
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