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With a regulated monopoly providing the distribution, there can be competitive suppliers, and competing customers, with difficult pricing problems.
"While G.M.'s margins remain low for an auto company running 94percentt of capacity, and much of its earnings are generated through the financing of cars rather than the manufacturing of cars, the fact is that the company is growing earnings in a difficult pricing environment," John Casesa, a Merrill Lynch analyst, said in a research note.
The research firm estimates that the more difficult pricing environment will continue throughout 2005 and perhaps into 2006 and 2007.
Merrill Lynch praised Dell's report for "again showing its ability to hit revenue targets while not sacrificing margin despite a difficult pricing and component cost environment.
However, risks for GM remain, including a Delphi strike, market share loss in the near term, a difficult pricing environment and residual and dealer risks.
"In addition, given its lower percentage exposure operating income exposure to PCs, we believe that the company will be able to weather a more difficult pricing environment," he said.
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"We are willing to pay a difficult price".
"The economic situation in the country is very difficult, prices for everything have risen and wages have stayed the same," said Anna Osenenko, a 19-year-old student.
"People donate for free, and free is a difficult price point to compete with," said Nick Seay, chief technology officer of Cellular Dynamics.
In areas where building is difficult, prices would still rise, but the overall effect would be less damaging, because people squeezed out would at least have somewhere to go.
"There will undoubtedly be job losses as the industry works its way through a very difficult price reduction, but these should be in the 5,000 to 10,000 range, out of the 380,000 current jobs, and significantly less than would have occurred under the previous fiscal regime," Sir Ian said.
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