Supply and Demand in the Global Automotive Industry Essay

Supply and Demand in the Global Automotive Industry - Essay Example According to the report findings the greatest machinery that has been behind the progression of the automotive industry are the principals of economy known as demand and supply. The law of supply states that keeping all other factors constant, the more the price of a particular product goes up the more the quantity of that particular product is supplied. On the other hand, the law of demand also provides that keeping all factors the same, when the price is high the demand for the product will be great. Therefore, the automotive industry has survived on these two principles to sustain itself in the market. It has always been about the quality of the cars manufactured and the prices about the market and customers. As the paper stresses economic ways, the global market, has been enjoying a relatively stable growth characterized by profits, and sales had improved to prerecession levels in countries. A substantial ambiguity concerning the future of the industry is still an issue. The European market looked much weaker around 2008, as it was just recovering from a six-year depression. Aggressive competition within the fluctuating market have risen customers’ expectations, consumers have become demanding and have increased on their preferences . Market fluctuation is caused by mobile client’s earnings; that is to say, customer’s earnings being seasonal. It affects the producers in a way that they cannot predict the size of the market and therefore, cannot be sure of the quantity to produce.