The automobile industry is best classified as oligopoly.
In an oligopoly, a few large firms dominate the market, and this is clearly seen in the automobile sector, where major companies like Ford, General Motors, Toyota, and Volkswagen hold significant market shares. While there are many smaller companies and new entrants, the market is largely characterized by a limited number of large players who have considerable control over pricing and output.
Additionally, these firms engage in non-price competition, such as advertising and brand loyalty, which distinguishes their products from those of competitors. Unlike perfect competition, where many suppliers sell identical products, or monopoly, where a single seller dominates, the automobile industry has a few key players that influence the market while still allowing for variation in product offerings. Therefore, the correct classification for the automobile industry is oligopoly.