INTRODUCTION
The aim of this paper is to show the trends in the car industry that changed radically from the beginning of the 80s. We examine the impacts of improvements in technology, the effects of externalities which will lead to the increase in cost, price discriminations and competitive structures. We discuss about car industry which is an oligopoly structure, and the recent environment of economic. Besides that, we also concert about the effect of externalities, on the other hand, the effect of the technological advancement and price discrimination. Finally, in conclusion, we conclude our views of the structure of oligopoly industry and how it’s changing competitive environment that will affect the market and consumers.

CURRENT ECONOMICS ENVIRONMENT
Global rescission influences most of the automobile manufacturing companies to cease production due to the short demand in the market. Microeconomic market factors have lowered demand and increase elasticity of demand in the car industry. For example, in Figure 1, it demonstrates the demand for the sales of cars [D1] has decreased and also become more elastic [D2]. It becomes flatter, showing the higher price change responsiveness. This is represented by a decrease in price from [P1] (at [E1]) to [P2] (at [E2]). Oligopoly industry will reduce supply when it is motivated by changes in demand. FIGURE 1

EFFECTS OF EXTERNALITIES

- GOVERNMENT POLICY OPTION
In 20 years time, there has been a dramatic fall of economy in the car industry. Government introduced an aviation tax on cars to control the environment damage which is relatively increasing the car price because the supplier’s cost of production had increased. FIGURE 2
Figure 2 show that when government implies tax on supplier, the car industry will reduce its supply to reduce cost. The supply curve [S] will shifts upward and become [S1]. The