Cars & Vehicles
Business and Industry

What kind of market structure is the automotive industry?

User Avatar
Wiki User
November 08, 2008 3:56AM

There are many ways to describe the market structure of the automotive industry. Here are two:

-One of heterogeneous buyers that make up the population and nearly homogeneous sellers. This means that everyone (the population) needs a car (because a car is not a luxury item), but everyone has different needs (ie: compare a mother of 4 to a construction worker). Thus, buyers are everyone in the population, and they are heterogeneous (different). But sellers are practically the same. GM, Ford, Chrysler, Nissan, Honda, Toyota, etc etc all offer BASICALLY the same products. Thus, they are homogeneous (similar).

-Buyers with high brand-preference and highly marketed sellers this means that many automobile buyers have a brand loyalty, and sellers market to cultivate that loyalty. A great example of this is Jeep and Harley Davidson. Both companies have created a kind of community amongst their owners (I'm sure we've all seen two Jeeps passing and the drivers wave at each other).