Does The Car Industry Falls Into Monopolistic Competition?

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Does The Car Industry Falls Into Monopolistic Competition?

2 Answers

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Answer 1

Monopolistic is not the same thing as a monopoly. Monopolistic competition is an industry with a good that is not homogenous thus the goods or products differentiated or different than all the other companies in the industry. There are twelve main companies, who make up most of the business:

GM
Ford
Chrysler
Mercedes
BMW
Porsche
Fiat (Ferrari, Maserati)
Honda
Toyota
Nissan
Hyundai (Kia)
VW (Audi, Bentley, Lambo, etc)

But there are hundreds, if not thousands, of car makers. But these 12 make up most (98%+) of the business.
So technically its not a monoply or an oligopoly. So I would say yes the car industry is monopolistic.

Answer 2

I don't know if you explained yourself properly either, but monopolies are usually characterized by a lack of economic competition. An industry or enterprise that has enough control to be able to dictate the conditions or terms under which others may have access to it would be a monopoly. That doesn't seem to be the case in the US. The auto industry is having so much trouble because of the competition from foreign auto manufacturers. Foreign manufacturers are producing better, more economical cars at more reasonable prices than the American companies.