EXCHANGE-RATE PASS-THROUGH AND RIVALRY IN THE SWISS AUTOMOBILE MARKET

This paper investigates the pricing rivalry among foreign automobile p roducers in the Swiss market. The main results from the dynamic analys is of two categories of automobiles between 1977 and 1991 are: First, the degree of exchange rate pass-through differs among source-countrie s despite the absence of quantitative restrictions on imports and of d omestic production facilities. However, for some countries, pricing st rategies show remarkable consistency across product categories and tim e-spans. Second, the degree of exchange rate pass-through is low, espe cially in the market for small-size automobiles. Third, this low degre e of pass-through may be attributed to a low degree of competition amo ng foreign sellers.