Review of Management and Economical Engineering, Vol. 7, No. 6 [617653]

Review of Management and Economical Engineering, Vol. 7, No. 6
125

THE COMPETITION – MANIFEST OF FREE INITI ATIVE FOR AUTOMOBILE S
MARKET

Nicolae -Daniel PETRESCU
Academy of Economic Studies Bucharest, Romania

Mariana PETRESCU
University of Craiova, Romania

Abstract: The competition represent the ensemble of interaction, relations establish between
economics agents in their fight to assure the supplies sources, the relati ons, the connections, the
rivalry, the fight between two ore more producers placed on a market. In automobiles domain the
powerful competitors brought technological improvements, improvements of passengers safety and
environment.
In case of automobile manu factures we can speak about severe competition on international market
and also Romanian market. On American market the producers had to produce high quality
automobiles, GM improves the Cadillac and Ford produce The Lincoln, a veritable competitor for
German luxury brands on United States automobiles market. The automobiles manufactures have to
know the permanent information about the strengths and the weaknesses of each competitor.

Keywords : automobiles, monopoly, oligopoly, position

Competition is a f undamental characteristic of market economy and represents the rivalry between
sellers in order to maximize the benefit and attract new buyers. Competition is represent by the
relations, the connections, the rivalry, the fight between two ore more producer s placed on a market
and is specific to market economy, named also competitive economy. Without competition can not be
evolution, improvement of services and products that are placed on a market at a given moment. “The
ensemble of interaction relations est ablish between economics agents in their fight to assure the
supplies sources and the outlets formed the competitive relations system.” (Balaure,2002) . “The
competitive situation of a firm in influenced by many factors. Competition in one field of activity and the
profitability in this field of activity is determined by different forces which are limit the competitive
space. The supplier’s negotiation power influence in a essential way the supply price and the supply
conditions and also the custom negotia tion power and the way in which this power act to obtain prices
and advantageous delivery conditions.” (Schneider, 2005) .

In case of automobile manufactures we can speak about severe competition on international market
and also Romanian market. In automob iles domain the powerful competitors brought technological
improvements, improvements of passengers safety and environment. An example of severe
competition and technological improvements are German producer Mercedes, BMW and Audi;
because the Japanese fir m Toyota did not have an automobile segment that can compete with them
Toyota invent the Lexus brand and Honda invent the Infinity model. On American market the
producers had to produce high quality automobiles, GM improves the Cadillac and Ford produce Th e
Lincoln, a veritable competitor for German luxury brands on United States automobiles market. In
order to succeed the automobiles the manufacturers had to deliver value and more satisfaction than
its competitors, for this reason the marketers had to adap t themselves to customers needs and
requires. Is important to obtain a concurrencies advantage by placing the penetrate market automobile
in customer mind. Chevrolet is one of the most promoted brand in the world. The competitors
identification seems to be easy, we can even say that Ford knew that his major competitors, on
American market are GM and Toyota, but the list of effective and potential competitors is bigger. Small
competitors present a risk for the automobile manufacturers and also the new techno logy because is
easy implement by small competitors. Pure monopoly is characterized in deliver by one single firm one
single product or service in some country or zone. A monopoly tendency now days in automobiles
domain for European market is the appearan ce of the single automobile that function with hydrogen
made by BMW, but the other competitors will counteract this model or will develop other alter native
technology propulsion. Oligopoly competition is define by few competitors and sever competition
betw een them .Every competitor have the possibility to know the market position of the others

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competitors. On Romanian automobile market a short oligopoly tendency appeared at the beginning
of ’90’s when on the market were only internal manufactures Dacia, Ol tcit and Aro .This manufacturers
established prices for selling automobile by a mutual convention and also delivered each other parts
and services used to manufacture automobiles. This tendency disappear in the same time with
entrance on the market of man y automobiles manufactures.

Monopoly competition is characterize by many competitors placed on different market segments in
order to accomplish the clients needs at a high level. We can speak about monopoly market tendency
in super luxury automobiles segment made by Maybach, Rolls Royce and Bentley. The products
differentiation is made by automobiles accessories and some little changes of inside and outside
design. These automobiles are manufacture at customer order , the customer can particularize hi s car
by modify a part of automobile’ s interior or exterior; most of this operation are hand made and for
buing a this type of automobile they can wait even a few years. Pure competition is characterize by
many existing competitors which offer the same pr oduct or service. Because the products and
services differentiation is little the prices will be almost the same. Automobiles market generally
function using pure competition rules, because exist a large number of automobile’s manufacturers In
our country un can say that we have a high level of competition , the manufacturers total number is 44
and each of them have several models.

Kotler and Armstrong define customers evaluation in this way : “After main competitors are identify the
marketing management i s asking now: Which are competitors objectives –what tries to find each
competitor on the market? Which is each competitor strategy? Which are the strengths and the
weaknesses of the competitors and which will be the competitors’ answers at firm’s actions? ” (Kotler
and Armstrong, 2005) . After competitors identification the automobiles manufacturs have to determine
the particularities, the used strategies, the strengths, the weaknesses and the way in which are used
to reaction (reaction models).

Any firm h as to supervise permanently competitor’s strategy. When American automobiles
manufacturers almost equalize Japanese mechanics quality, the Japanese manufacturers improve
automobiles sensorial attributes . As explain an engineer who works at Ford “ we spe ak about other
things now… the signalization hand laver has not backlash…The speed used to open and close the
door’s windows …the way you feel at touch the acclimatization button…this is the next competition
shade for the clients. “(Kotler, 2006). The a utomobiles manufactures have to know the permanent
information about the strengths and the weaknesses of each competitors. Corresponding to Arthur D.
Little advising company , firm can have one of the six competition positions on the market :
Dominant posi tion – the automobiles manufacturer controls the behavior of the other competitors
and also has a lot of strategically options.
Force position – the automobiles manufacturer actions in a independent way without affecting his
position in a long period of time, maintaining also his position on long term no matter what are the
other competitors actions.
Favorable position – the automobiles manufacturer has one good point and over average possibilities
to improve it.
The performance of the automobiles manu facturer can sustain firm’s existing on the market but the
firm’s chance to improve its position is under average.
Weak position – is characterize by an insufficient performance and for succeed to continue its existing
the automobile manufacturer has to ma ke major changes.
Not viable position – the performance of automobiles manufacturer is insufficient and the firm has no
possibility to improve its position.

Using this evaluation the automobiles manufacturers can decide what competitors will attack on t he
market. Because almost of the automobiles manufacturer action on internal market and also on
international market, they have to confront the competitors who act on these markets. The
automobiles manufacturer can meet on international market the same com petitors as concurred on
national market or it can meet on international market some competitors for first time. To succeed in
competition the automobiles manufacturer has to understand the behavior of its competitors. The
competition influence the automo biles manufacturers and also has positive and negative effects that
must be take in consideration. The competition influence the market and also the automobiles
manufacturer but if the automobiles manufacturer has a performing monitoring and management,
competition can act its advantage.

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The marketing competitors programs placed on automobiles market can help clients to better
understand the automobile. The competition negative effect on automobiles market can appear when
a competitors penetrate the mar ket and the other competitors try to improve the market share, in this
situation each automobiles manufacturer try to convince the potential clients to buy its product
because this is more better, more performing, has reasonable price, more economic or may be more
qualitative. Firms that until yesterday were competitors today form big automobiles manufacturers
groups; we can put in register in this case The Renault -Nissan which has in its components Dacia
Group, but also had bought a part of Russian car manu facturer Lada; Peugeot -Citroen is also a good
example; other big firms have bought small producers, an example can be of the big American car
manufacturers Ford and GM which bought European car manufacturers like Saab, Volvo, Opel, and
the Koreans from GM Dat, (the oldest Daewoo car manufacturer); they also bought firms from
American market like Lincoln, Cadillac, Buick, or Chevrolet. A very good development has German car
manufacturer Volkswagen who bought brands like Skoda from Czech Republic, Seat from S pain,
Italian sport car manufacturer Lamborghini, and als o the super luxury car Bentley. There are also
collaborations between car manufacturers, PSA Group has built with Toyota a plant in Czech Republic
where are made Citroen C1, Toyota Aygo and Peugeot 1 07, the diesel engines for this collaborations
are provided by PSA group and gasoline engines are manufactured by Toyota. Other partnership is
Mitsubishi with Volvo, they are building in Holland on the same technical platform Mitsubishi Carisma
and Volvo S 40 models; PSA group had developed partnerships with Ford for diesel engines and with
BMW for small gasoline engines. Mitsubishi has signed a collaboration with PSA Group for developing
and produce in Japan the Mitsubishi Outlander, Citroen C -Crosser, and Peugeot 4007, in this
collaboration the diesel engines are provided by PSA and the gasoline engines are their own for each
brand. Other example is Poland where in the same plant are bui ld Fiat Panda and Ford K. Without
automobiles the world would looked di fferent today ,the automobiles give us the possibility to move by
a place to the other on long distances.

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