Microeconomics: Analysis of Nissan's Electric Car Launch

The assignment delves into microeconomics by evaluating Nissan's introduction of a new electric vehicle within the context of Japan's automobile industry. The paper discusses market structures like oligopoly, where few large companies dominate and compete heavily. It highlights how countries' push towards reducing fossil fuel usage has increased interest in electric vehicles to combat pollution. By launching an electric car more powerful than its GT-R model, Nissan aims to enhance competitive standing against other major players such as Honda and Toyota. The paper concludes that these strategies are crucial for gaining market share in Japan's oligopolistic automobile sector.

Running head: MICROECONOMICS
Microeconomics
Name of the Student
Name of the University
Author note

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Table of Contents
Introduction................................................................................................................................2
Relevance to microeconomics....................................................................................................2
Conclusion..................................................................................................................................3
Reference....................................................................................................................................4

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Introduction
Microeconomics is a branch of economics that deals with behaviours of individual
economic agents and single market in economics. The paper evaluates a news article based
on Nissan’s new electric car using relevant theories of microeconomics.
Relevance to microeconomics
Market is an important branch of economics. The term market in economics defines a
relation between sellers and buyers. The two parties involve in exchanger of good using
money as a medium of exchange (Fine, 2016). Markets are of several types. The number of
sellers and buyers determine the extent of competition and marketing strategy of sellers. The
various types of markets are perfectly competitive market, monopoly market, oligopoly
market and monopolistic competition.
The Automobile industry generally has an oligopolistic structure. Oligopoly is a
market characterized by few sellers and large number of buyers. The few large players in the
market capture a major share in the market. Japan is considered as one of top three car
producing countries. Nissan, Honda, Toyota, Subaru, Daihatsu, Mazda and Lexus are some of
the dominating car brand in the industry (japanindustrynews.com, 2016).
In view of growing pollution globally, countries attempt to reduce the use of fossils
fuels as much as possible. The petrol and diesel run vehicles generates significant pollution.
To counter the pollution externality countries increasingly make use of electric vehicles
(Rader, 2014). Japan’s famous car company Nissan has launched a new concept of electric
car which is more powerful that its GT-R sports car (bloomberg.com, 2017). In the oligopoly
market extensive competition prevails among the few sellers. In the Automobile industry as
the competition speed up leading car companies are trying to enhance their performance to

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grab a greater share of customers. The companies are now investing their money and time to
provide a better longevity. In response to Nissan’s step the other two big companies Honda
and Toyota has launched battery powered models. The car companies in Japan are trying to
facilitate their competitive exposure by introducing customer oriented services. The new
electric car gives Nissan an opportunity to compete in the championship of Formula E racing
starts from 2018.
Conclusion
In the oligopolistic market structure of Japan’s automobile industry the major car
companies are competing with each other by improving their manufactured car. Nissan,
Honda, Toyota, Renault Mitsubishi all are involved in the competition and trying to attract
more buyers.

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Reference
Fine, B. (2016). Microeconomics. University of Chicago Press Economics Books.
Ma, M., & Sano, M. (2017). Nissan Unveils an Electric Car More Powerful Than Its GT-
R. Bloomberg.com. Retrieved 4 November 2017, from
https://www.bloomberg.com/news/articles/2017-10-25/nissan-unveils-electric-car-
that-beats-sportscar-gt-r-in-power
Neely, C. (2017). The Japanese Automotive Industry. Japan Industry News. Retrieved 4
November 2017, from https://www.japanindustrynews.com/2016/03/japanese-
automotive-industry/
Rader, T. (2014). Theory of microeconomics. Academic Press.