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Evolution of Automotive Industry

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Evolution of Automotive Industry
The automotive industry is a competitive yet lucrative business industry. Everyone is designing and developing the latest revolutionary model car. Automotive manufacturers and dealers are able to price their products at exorbitant prices if they so choose because in most cases the consumer does not have a choice but to purchase a car. We all need transportation and with that in mind automotive traders basically determine product pricing. The market structure of the automotive industry is relative to the number, size, kind and distribution of buyers and sellers (ModernIr LLC [MILLC], 2008). Needless to say the automotive industry is a very huge market. The automotive industry is considered to be in the perfectly monopolistic competition market structure, having many sellers of a similar product yet each seller’s product is somewhat unique to the producer. There are no seller or buyer entry barriers and there are numerous buyers and sellers within this market structure. One main purpose of the producers of the automotive industry is profit. As with any industry the introduction of a new company, leads to the assumption of new and better products. In the case of the automotive industry that case might be very true in a dwindling economy where there is no foreseeable relief on the rising gas prices. Consumers are now concerned with the cost of gas consumption and are ready to opt for more cost effective means of transportation. Companies promoting the hybrid and gas saving type of cars tend to attract these consumers. These gas efficient car companies are drawing consumers away from the traditionally desired bigger cars like the sports utility vehicles (suvs) and pickup trucks that tend to use more gas. “Sales of pickup trucks have plummeted in recent weeks, prompting an announcement from Ford last week that it is slashing truck

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