ABSTRACT
The intensity of competition between component manufacturers for original equipment sales helps to explain why there should be pressure for agreements on retail prices, at least on the part of those selling for original equipment. The more saturated the market, the more competition takes the form of changes in product, superficial, and of advertising expenditure incurred to bring home the changes to the public. The nature of competition between the retailers of motor vehicles was much affected before the war by the efforts made by vehicle manufacturers to expand their outlets. The Big Five car manufacturers, who already dominate the market for light commercial vehicles, have been moving into the heavy vehicle field. The reason why vehicle manufacturers continue to buy out on such a scale is that parts and component suppliers who sell to the entire motor industry can achieve economies of scale far greater than could be achieved if they were producing for one vehicle manufacturer alone.
