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Historic market cycles in the world automotive industry
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The economic theory of industry lifecycles is a standard tool to explore the historic development of specific industries. Its basic idea is that an industry develops according to a typical, sequential pattern of emergence, rise, maturing and finally decay. This article compares conventional industry lifecycle theory as represented by the seminal approach of Gort and Klepper (Gort / Klepper 1982) with an alternative explanation of industry evolution, i.e. the application of Hirschman s theory of economic development (Hirschman 1958; Hirschman 1968) to specific industries. The world passenger car industry and its long-term history serve as the case of empiric reference. The analysis is non-technical and rests on a limited set of macroscopic parameters (number of manufacturers, market entry and exit, output) in the World s regions (Europe, the Americas, Asia including Oceania).
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