The Position and Behaviour of Smaller Firms in the Motor Industry

Management Decision - 1977
D.G.Rhys

Tóm tắt

In the British and European motor industry there co‐exist firms which differ widely in size. Given the existence of economies of scale the smaller firms are faced with the problem of survival; more precisely, of being able to charge a premium price to offset higher unit costs. After confirming the existence of scale economies this paper looks at the corporate strategies of smaller firms, but first it is necessary to clarify what we mean by “smaller firms”. In any market for any good where economies of scale exist in its production, firms smaller than the optimum could, if no non‐scale problems exist, be at a cost and, with competition, a profit disadvantage. However, in the motor industry the term “smaller” covers various types of operation.

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Tài liệu tham khảo

It, 1976, Jensen or Lotus. Indeed Jensen left the market

Information, 1972, Bulletin of Economic Research, 24

All, 1974, Autocar

10.4159/harvard.9780674188037

That, to spread fixed costs the medium-sized and small firms will avoid frequent style changes. As J. A. Menge has shown, only large, 1962

A die may have a lifetime of 500,000 pressings, which can be achieved by a mass producer in say two years, but by a "Rover

See, 1974, Autocar, 6th

Although, 1969, Rolls-Royce only made a profit on its automotive side once between 1962 and

Rhys, D. G., The Motor Industry: An Economic Survey, London, Butterworths, 1972, pp.54-60.

These, An output, 3

In, 1969, rates of return

Not, 1974, blame

That, smallness is neither necessary nor, as seen above, sufficient for the production of "quality

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