The Reverse Pricing Strategy for Car Manufacturers in Oligopolistic Market

With the rapid growth in demand for cars in China and the increasing market competition in recent years, car manufacturers have been playing the price war in order to maximize the market share for a long time. However, the price war has reduced the enterprise profits. There is a serious threat to the long-term development of the whole industry. Based on the enterprise pricing strategy, this paper uses two-stage successive game model to explain that the reverse pricing strategy can be used under certain condition. The model is suitable for the oligopoly enterprises with brand loyal consumers. At the end, the paper argues the differentiation production and competition and core competitiveness enhancement. It is necessary for oligopoly companies to get more consumer surplus from loyal consumers.