Question

You overhear a customer in a coffee shop say, “It’s time to end the world automobile-manufacturing monopoly.” As an economist, what points would you make correct the speaker?

Answer 1

As an economist, I would like to say that there is no monopoly in the automobile manufacturing with the progress of globalization efforts. There are companies from Germany, Japan and the USA that have significant market share in automobile products. Though, these companies have manufacturing bases in countries like Mexico, Brazil, China & India. It means that there is a trend of global sourcing and on the vicinity of the market, the companies are opting for the manufacturing setups across the globe. It has helped the companies to reduce the cost and become competitive in international market. Hence, there is no place of monopolization in automobile manufacturing. Rather, it is the lower labor cost, vicinity to the target market and favorable government policy that has driven the automobile manufacturing.