Non-Price Determinants of Automotive Demand: Restyling Matters Most

Oleg Korenok, George Hoffer () and Edward Millner ()
Additional contact information
George Hoffer: Department of Economics, VCU School of Business
Edward Millner: Department of Economics, VCU School of Business

No 903, Working Papers from VCU School of Business, Department of Economics

Abstract: This paper analyzes market share changes in automobile and light truck submarkets. We find that new product, as measured by restyling, represents the most consistent, dominant determinant of demand. On average a ten percent reduction in relative price would yield only one-tenth the market share impact of a restyling. Alternatively, one would have to double one’s relative advertising expenditures to match the impact of a restyling. Several demand determinants not previously modeled, including rebranding and warranty curtailments, were detrimental to domestic manufacturer market shares. Safety appliance adoptions and changes in vehicle reliability had minimal impact on demand.

Keywords: automobile pricing; warranty; safety appliances; rebranding; reliability (search for similar items in EconPapers)
JEL-codes: L11 L15 L62 M31 M37 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2009-09
New Economics Papers: this item is included in nep-ind
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Forthcoming in Journal of Business Research

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http://www.people.vcu.edu/~okorenok/JBR090809.pdf First version (application/pdf)

Related works:
Journal Article: Non-price determinants of automotive demand: Restyling matters most (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:vcu:wpaper:0903

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