3 ms·

>Cars mostly look the same now because they're in the final stages of commoditization Consolidation, not commoditization. Cars aren't barrels of oil or truck c

by pydry 4y ago

>Cars mostly look the same now because they're in the final stages of commoditization Consolidation, not commoditization. Cars aren't barrels of oil or truck cars of coal. It's just impossible to compete as a car company unless you are very niche, a billionaire or a state. The big 3 vertically integrated to the hilt and erected monumental barriers to entry and then became very, very conservative.

lotsofpulp 4y ago
What big 3? I can count at least 8 brands off the top of my head which sell a variety of vehicles. Tesla started relatively recently, and I have seen a few Rivian around. Kia and Hyundai made large gains in the last 30 years.
- ehnto 4y ago
  Most car brands you know of are owned by just a handful of the others. A perfect example is that Kia is owned by Hyundai Motor Group, who also own Genesis. There are definitely more than three though, I will give you that, but it is definitely a story of consolidation over the past 30 years. https://www.whichcar.com.au/car-advice/car-manufacturer-brands-family-tree https://www.whichcar.com.au/car-advice/car-manufacturer-bran...
  - lotsofpulp 4y ago
    And yet Tesla is out there with the highest market cap of them all, which contradicts the person I replied to that there is no variety or an impossibly high barrier to entry. We have numerous Korean, Japanese, German, and American vehicles on the road with many varieties of sizes and performance. And obviously you will need to have deep pockets to enter the car business, why wouldn’t you for such a complex machine? That does not mean there is excessive consolidation in the market.
- biftek 4y ago
  Tesla and Rivian are small fish. "The big 3" is a phrase referring to the US automakers; Ford, GM, and Stellantis (formerly Fiat-Chrysler). On a global scale you also have giants like Toyota, Volkswagen Group, Hyundai Group, Renault–Nissan Alliance, and Geely. These companies make most of the brands you've heard of.
  - lotsofpulp 4y ago
    I know, but that is far more than 3. And the small fish Tesla’s market cap is $584B. Obviously the barrier to entry to manufacture a hugely complicated machine will be high, but the data indicates it is not impossibly high.
    - biftek 4y ago
      Automakers are measured by units sold and Tesla ranks very low on that list. When Toyota sells 10 million cars a year it's not news, they have basically reached peak growth. Tesla's valuation is higher because they keep selling more cars and still have room for growth (and because of Elon Musk himself).
trgn 4y ago
Commoditization is the right word to use imho. I think OP is using it here in more broadly philosophical (marxist) sense; a reductive process which makes mass manufactured products essentially interchangeable in the market. The only differentiation that can arise then in is in terms of branding. That's exactly what cars are now. Identical metal boxes, captured by marketing, purely differentiated on intangibles like brand identity. And even this differentiation is becoming less and less relevant. How many people still really care about their cars? (mostly men do, and even that's waning). They're basically washing machines now.

by pydry 4y ago

lotsofpulp 4y ago

What big 3? I can count at least 8 brands off the top of my head which sell a variety of vehicles. Tesla started relatively recently, and I have seen a few Rivian around. Kia and Hyundai made large gains in the last 30 years.

ehnto 4y ago
Most car brands you know of are owned by just a handful of the others. A perfect example is that Kia is owned by Hyundai Motor Group, who also own Genesis. There are definitely more than three though, I will give you that, but it is definitely a story of consolidation over the past 30 years. https://www.whichcar.com.au/car-advice/car-manufacturer-brands-family-tree https://www.whichcar.com.au/car-advice/car-manufacturer-bran...
- lotsofpulp 4y ago
  And yet Tesla is out there with the highest market cap of them all, which contradicts the person I replied to that there is no variety or an impossibly high barrier to entry. We have numerous Korean, Japanese, German, and American vehicles on the road with many varieties of sizes and performance. And obviously you will need to have deep pockets to enter the car business, why wouldn’t you for such a complex machine? That does not mean there is excessive consolidation in the market.
biftek 4y ago
Tesla and Rivian are small fish. "The big 3" is a phrase referring to the US automakers; Ford, GM, and Stellantis (formerly Fiat-Chrysler). On a global scale you also have giants like Toyota, Volkswagen Group, Hyundai Group, Renault–Nissan Alliance, and Geely. These companies make most of the brands you've heard of.
- lotsofpulp 4y ago
  I know, but that is far more than 3. And the small fish Tesla’s market cap is $584B. Obviously the barrier to entry to manufacture a hugely complicated machine will be high, but the data indicates it is not impossibly high.
  - biftek 4y ago
    Automakers are measured by units sold and Tesla ranks very low on that list. When Toyota sells 10 million cars a year it's not news, they have basically reached peak growth. Tesla's valuation is higher because they keep selling more cars and still have room for growth (and because of Elon Musk himself).

trgn 4y ago

Commoditization is the right word to use imho. I think OP is using it here in more broadly philosophical (marxist) sense; a reductive process which makes mass manufactured products essentially interchangeable in the market. The only differentiation that can arise then in is in terms of branding. That's exactly what cars are now. Identical metal boxes, captured by marketing, purely differentiated on intangibles like brand identity. And even this differentiation is becoming less and less relevant. How many people still really care about their cars? (mostly men do, and even that's waning). They're basically washing machines now.