The Auto Industry: The Power Of Buyers

1301 Words 6 Pages
Power of Buyers: High The automobile industry is made up by the regular day to day people you meet. Car buyers have strong bargaining power because they determine what they want based on the wide variety of product differentiation throughout the automobile industry. The power of a buyer can easily walk out of one dealership, and walk into another dealership and get the same car they wanted at the price they wanted. Over the years, brand loyalty has been the biggest key factor for the consumer when purchasing a vehicle. Today, that has all changed as the consumers are experiencing a paradigm shift when purchasing a vehicle. People are now shifting their perspective of their car purchases because they see “…cars more as transportation machines” …show more content…
Bikes can only get you so far before you exert all your energy and air travel is more ideal for long distance. Public transportation does pose as a threat to the auto industry, especially in cities with a higher population density. Although, the public transit system does not completely replace private transportation. Substituting a vehicle for walking, biking, or public transit puts a strong effect on a person’s life in today’s society. Private transit allows you to “travel at any time to any place,” “reach the hospital or simply return home, you would be able to do so immediately” (Jones, 2014). The need for the auto industry can accommodates anyone’s specific needs, serious or not (Jones, 2014). The auto industry has so much power over the possible substitutes because it is the easiest way of transportation and can get you anywhere, short distance or long …show more content…
The SBA regulates the “auto manufacturing, repair, maintenance, recycling, sales and dealerships” on federal and states levels (Business Guides, 2015). The auto industry has to follow the laws and regulations of how their products a built following regulations on “emissions standards, fuel economy standards, and safety standards” or they will face fines and have to make changes (Business Guides, 2015). Although, many automotive companies have manufacturers outside the United States where those laws do not be pertinent, it lowers the power of the government to step in on their

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