Chap21

• Oligopoly


  Few large firms dominate the market
• Global motor industry


  • More than 70% dominated by 6 large firms (Toyota, Volkswagen, GM, Renault-Nissan, Hyundai, Ford)
  • Fraction supplied by small operators (Porsche, Roll-Royce, Bugatti, BMW, Ferrari)
• Oligopoly


  • Prices tend to be fairly stable
• Leading automakers in February 2018 - U.S. market share

  • GM sells vehicles under the following brands: Buick, Cadillac, Chevrolet, GMC, Holden, Jiefang, OnStar, Wuling, Baojun
  • In 2017, PSA Group (Peugeot, Citroen) and GM closed a deal in which the French carmaker acquired GM's Opel and Vauxhall brand
• Niche market


  A market for a product or service, perhaps an expensive or unusual one, that does not have many buyers, but companies can make good profits
• Niche market in the car industry

  • Morgan Cars of Malvern in England supply sports cars
• The Morgan EV3


  • An all-electric vehicle that is bespoke made, hand crafted and exhilarating to drive
• Monopoly


  One firm dominates the market
• Oligopoly


  Few firms dominate the market
• Oligopoly


  • Few firms (no exact number but could be as few as three)
  • Large firms dominate (large market share when combined)
  • Different products (close substitutes but with differences in style, size, shape, performance, colours, quality)
  • High barriers to entry (high set-up costs)
• Oligopoly


  • Collusion (informal agreement between firms to restrict competition)
  • Non-price competition (compete through advertising and promotions)
  • Price competition (market leader often sets the price and others follow)