Vehicle Choice Behavior And The Declining Market Share Of U.S. Automakers

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Vehicle Choice Behavior And The Declining Market Share Of U.S. Automakers

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Kenneth E. Train
Clifford Winston

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Abstract

We develop a consumer-level model of vehicle choice to shed light on the erosion of the U.S. automobile manufacturers' market share during the past decade. We examine the influence of vehicle attributes, brand loyalty, product line characteristics, and dealerships. We find that nearly all of the loss in market share for U.S. manufacturers can be explained by changes in basic vehicle attributes, namely: price, size, power, operating cost, transmission type, reliability, and body type. U.S. manufacturers have improved their vehicles' attributes but not as much as Japanese and European manufacturers have improved the attributes of their vehicles. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 48 (2007)
Issue (Month): 4 (November)
Pages: 1469-1496
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Handle: RePEc:ier:iecrev:v:48:y:2007:i:4:p:1469-1496

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McManus, Walter, 2007. "Economic analysis of feebates to reduce greenhouse gas emissions from light vehicles for California," MPRA Paper 3461, University Library of Munich, Germany. [Downloadable!]
Struben, Jeroen J.R.,, 2007. "Identifying Challenges for Sustained Adoption of Alternative Fuel Vehicles and Infrastructure," Working papers 37306, Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
McManus, Walter, 2006. "Can proactive fuel economy strategies help automakers mitigate fuel price risk?," MPRA Paper 3460, University Library of Munich, Germany. [Downloadable!]

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