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auomobile industry

             Size- The automobile industry consists of many sections, from production of automobiles to production of parts and components to even the retail aspect of automobiles. Given the nature of the products and the quantity and quality demanded, it should come as no surprise that this industry is one of the largest in the U.S. and world economies. The large number of people the industry employs has made it a key determinant of economic growth (Encarta.com). This industry has a spiral effect on the economy as the finished products are often used as factors of production in other industries. At the same time, in order to produce these vast amounts of automobiles, there is a heavy investment in the steel industry and other industrial products (Klepper, 11).
             In recent years (1995-2001) the number of companies in the industry, including all sections, has reduced from about 4100 to around 3100 but yet sales have risen from B$ 33121 to B$41716 over the same time period (table 1). Post World War II, the Big 3: General Motors (GM), Ford and Chrysler have been near the top of the list of industrial firms with the most sales revenue. Given that these three giants account for 66% of the production of cars sold in America, the size of the entire industry is immense (autoindustry.com). .
             Table 1: Sales in Billions of Dollars .
             1995 1996 1997 1998 1999 2000 2001.
             Vehicles and Engines SIC 34.1 23715 27199 28235 28607 29580 28492 27272.
             Bodies SIC 34.2 2360 2355 2698 2511 2468 2490 2597.
             Parts SIC 34.3 7046 7252 8305 9107 8658 8887 9305.
             Tires SIC 25.11 1647 1779 1612 1441 1528.
             Vehicle electrical SIC 31.61 1102 1052 1066 1112 1014.
             Components sub total 9406 9607 11003 11618 11126 11377 14444.
             TOTAL 33121 36806 41987 43056 43382 42434 41716.
             Office of National Statistics: Annual Business Inquiry, published December, 12 months in arrears.
             Structure- The automobile industry as we know it today, an oligopoly, was not always structured this way.

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