KIA Motors Mexico: successful case of competitive strategy in a market of monopolistic competition, 2015-2018

Eric Israel Ríos Nequis, Isaí Contreras Álvarez, Juan González García

Abstract


The article analyzes, theoretically and empirically, the importance of competitiveness, which is the basis for a successful entry inside automaker´s market with a structure of monopolistic competition on global scale, such is the case of the Mexican automotive industry. The mentioned business sector is an example of constant changes in its market structure with the recent entry of Korean companies which are Hyundai and KIA motors. The results demonstrate that since the entry of KIA Motors in July 2015, there was some market deconcentration in the industry, leading it to become the fifth largest assembler in Mexico. The graphic analysis of market shares indicates that Hyundai is less successful than its partner brand (KIA). However, the econometric results indicate that the deconcentration of the market is associated to a greater extent with the growth of the Hyundai´s market share , as well as, the growth of smaller brands in its market quote that have longer time competing in Mexican market, comparing them to Korean companies such as Hyundai and KIA in Mexico. The results invites us to do a reflection on the classical assumptions about entry into a structure of monopolistic competition and its degree of concentration because it is commonly mentioned that entry of new competitors deconcentrates the market. However, if the rivalry increases, there will also be a bigger market deconcetration. It is concluded that in the Mexican automotive industry, the competitiveness and competitive strategy of brands (automakers), explain the concentration and performance of companies in this type of market.


Keywords


competitiveness; monopolistic competition; concentration; strategy; automotive

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DOI: https://doi.org/10.21640/ns.v11i23.1839

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