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> A good example of this is the American auto industry. Your example shows exactly why this idea is flawed. Three competitors is what is called an oligopoly. T
by coliveira 7y ago
> A good example of this is the American auto industry.
Your example shows exactly why this idea is flawed. Three competitors is what is called an oligopoly. There is nothing healthy about that.
- deelowe 7y agoThe counter argument to this is that the auto industry runs on razor thin margins and is littered with failed companies. Hell, the entire industry almost went belly up in the late 00s. Just look at how much cash had to be funneled into Tesla, which is a small market luxury brand.
- nickik 7y agoI would disagree with that. For a market like that 3 competitors in one country is actually probebly close to maximal efficnecy. There is such a unification in basic car concepts that adding more providers really doesn't add much. Specially if there is also tons of international competition as well. When there was a real need for a new company, because of EV shift, a new one happened. If it was a real oligopoly such could not be done. In fact the Big 3 attempt at using their market power against Tesla have mostly been marketing oppertunites for Tesla.
- magduf 7y agoDon't forget, there's a LOT more than 3 competitors in the auto market. There's 4 in America now (Ford, GM, Fiat/Chrysler, Tesla), but that doesn't count all the foreign automakers, many of whom have manufacturing plants right here in the US: Honda, Toyota, BMW, VW, etc. Just looking at cars on the road, the "American" automakers don't even appear to have a majority of sales.
- nickik 7y agoThat's why I wrote: Specially if there is also tons of international competition as well. And Fiat is European now I think.
- dangerbird2 7y agoFac is based in London, but it’s two main subsidiaries, formerly fiat and Chrysler, are still based in Italy and Detroit respectively