Non-price determinants of automotive demand: Restyling matters most

Oleg Korenok, George E. Hoffer and Edward L. Millner

Journal of Business Research, 2010, vol. 63, issue 12, 1282-1289

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 10% 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)
Date: 2010
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:63:y:2010:i:12:p:1282-1289

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