Too many car companies!

Please, government! Let them go bankrupt! Let them go out of business!

There Are Too Many Car Companies Anyway, writes Michael E. Marks:

The result of having too many [automobile manufacturers] is exactly what we are now seeing. Not enough companies can earn their cost of capital.

But with government support, they can hang on, often for a very long time, which reduces profits throughout the industry, which leads to less investment, lower quality and less innovation. So if our government is going to aid and abet this poor outcome, perhaps it should think about supporting only one of these companies, or two at the most. We just don't need three. Period. What we need is less choice.

And the grounds for this assertion that there are too many car manufacturers?

I've picked two other categories, cellphones and computers. Both are products bought by substantial numbers of consumers, and both are products sold globally by major international companies. First some overall numbers:

Product	Units Sold Globally	Units Sold in the U.S.
Cellphones	1.2 billion	146 million
Personal Computers	271 million	64 million
Automobiles	91 million	16 million

These are all 2007 numbers. They'll likely be lower for 2008 and 2009

Now let's look at the number of global brands of each, available in the U.S.:

Major Cellphone Brands (8)

Apple
BlackBerry
LG
Motorola
Nokia
Palm
Motorola
Samsung
Sony Ericsson

Major Personal Computer Brands (7)

Apple
Dell
Hewlett-Packard
Lenovo (previously IBM)
Panasonic
Sony
Toshiba
Toshiba

Car Brands Available in the U.S. (40)

Audi
BMW
Buick
Cadillac
Chevrolet
Chrysler
Corvette
Dodge
Ferrari
Ford
Honda
Hummer
Hyundai
Infiniti
Jaguar
Jeep
Kia
Lamborghini
Land Rover
Lexus
Lincoln
Lotus
Maserati
Mazda
Mercedes-Benz
Mini
Mitsubishi
Nissan
Pontiac
Porsche
Saab
Saturn
Scion
Smart
Subaru
Suzuki
Tesla
Toyota
Volkswagen
Volvo

And the article continues.

In sum: It is helpful for companies to fail. Industry consolidation is a good thing.

And my view?

I think he's right!