Market Analysis: Car industry
Market Analysis: Car industry
A market is a platform where the forces of demand and supply, essentially in the form of buyers and sellers interact. It is a switchboard that directs those with a commodity towards those who are in need of it. Since demand and supply exists for virtually all products, similarly a market for cars also exists. The car market globally is dominated by the Japanese after the decline in the American car makers after the World War II. This market today is dominated by names like Honda, Toyota, Chrysler (now bankrupt), GM (now bankrupt), Mercedes, BMW and Ford etc. In the recent years, the market for cars has undergone major demand and supply changes, causing the prices to fluctuate, but this fluctuation has been a stable one.
Demand Forces
The demand for cars in the world, in general, was increasing until the world was hit was a recession. The recession has impacted demand negatively. Demand can be defined as the quantity of a commodity, in our case cars, demanded at a certain price over a given period of time.
The demand for cars is price elastic, which means that a price and quantity demanded have an inverse relationship, and an increase in the price of cars will cause the demand to fall. The world market for cars has also seen a downward trend on the demand graph due to the recent economic crisis in the world. All the sectors in the economies all over the world have seen a decline in demand. Since all the sectors within an economy are interrelated, therefore the demand of the car market will also have an impact on the demand situation in the different raw material markets.
Currently it is the global recession which has an impact on the demand of cars. However, when the markets are functioning normally, there are several other factors which impact demand. First and foremost this demand is influenced by income per capita. Income per capita refers to the amount of national income received by individuals in the country. The
A market is a platform where the forces of demand and supply, essentially in the form of buyers and sellers interact. It is a switchboard that directs those with a commodity towards those who are in need of it. Since demand and supply exists for virtually all products, similarly a market for cars also exists. The car market globally is dominated by the Japanese after the decline in the American car makers after the World War II. This market today is dominated by names like Honda, Toyota, Chrysler (now bankrupt), GM (now bankrupt), Mercedes, BMW and Ford etc. In the recent years, the market for cars has undergone major demand and supply changes, causing the prices to fluctuate, but this fluctuation has been a stable one.
Demand Forces
The demand for cars in the world, in general, was increasing until the world was hit was a recession. The recession has impacted demand negatively. Demand can be defined as the quantity of a commodity, in our case cars, demanded at a certain price over a given period of time.
The demand for cars is price elastic, which means that a price and quantity demanded have an inverse relationship, and an increase in the price of cars will cause the demand to fall. The world market for cars has also seen a downward trend on the demand graph due to the recent economic crisis in the world. All the sectors in the economies all over the world have seen a decline in demand. Since all the sectors within an economy are interrelated, therefore the demand of the car market will also have an impact on the demand situation in the different raw material markets.
Currently it is the global recession which has an impact on the demand of cars. However, when the markets are functioning normally, there are several other factors which impact demand. First and foremost this demand is influenced by income per capita. Income per capita refers to the amount of national income received by individuals in the country. The