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Managing product life cycle in the auto industry: evaluating carmakers effectiveness

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  • Giuseppe Volpato
  • Andrea Stocchetti

Abstract

This article analyses the evolution of Product Life Cycle (PLC) policies of main carmakers in the three main European markets (Germany, Italy and France) through sales data regarding 212 models of 13 major carmakers for the period 1970–2006. A subsample including more detailed data (sales and features) of 125 car models along the period 1984–2005 has been investigated with the aim of comparing the effectiveness of product innovation and product line extension. According to our results, PLC is getting dramatically shorter, but the reduction does not apply to maturity and saturation phases. Carmakers tend to support sales with a policy of product line extension, while no evidence of effectiveness of such policies emerges. Product innovation seems related to increase in sales, although the introduction of new models and versions is generally delayed with respect to the optimal Life Cycle (LC) timing.

Suggested Citation

  • Giuseppe Volpato & Andrea Stocchetti, 2008. "Managing product life cycle in the auto industry: evaluating carmakers effectiveness," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 8(1), pages 22-41.
    • Handle: RePEc:ids:ijatma:v:8:y:2008:i:1:p:22-41
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    References listed on IDEAS

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    1. Polli, Rolando & Cook, Victor, 1969. "Validity of the Product Life Cycle," The Journal of Business, University of Chicago Press, vol. 42(4), pages 385-400, October.
    2. William E. Cox & Jr., 1967. "Product Life Cycles as Marketing Models," The Journal of Business, University of Chicago Press, vol. 40, pages 375-375.
    3. Giuseppe Volpato & Andrea Stocchetti, 2002. "The role of ICT in the strategic integration of the automotive supply-chain," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 2(3/4), pages 239-260.
    4. Petri Suomala, 2004. "The Life Cycle Dimension Of New Product Development Performance Measurement," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 193-221.
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    Citations

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    Cited by:

    1. Annika Becker & Raik Stolletz & Thomas Stäblein, 2017. "Strategic ramp-up planning in automotive production networks," International Journal of Production Research, Taylor & Francis Journals, vol. 55(1), pages 59-78, January.
    2. Vujadin Vesovic & Dragutin Jovanovic & Milos Arsic & Zoran Avramovic & Svetozar Sofijanic & Boban Djorovic & Natasa Gospic & Nena Tomovic & Dragan Milosevic & Mladen Dobric & Sinisa Arsic & Dragan Kos, 2022. "Identification of the Right Moment for Motor Vehicle Replacement—Life-Cycle Analysis in Serbia and Montenegro," Sustainability, MDPI, vol. 14(5), pages 1-22, February.
    3. Volpato, Giuseppe & Stocchetti, Andrea, 2009. "Old and new approaches to marketing. The quest of their epistemological roots," MPRA Paper 30841, University Library of Munich, Germany.
    4. Gaël Le Mens & Michael T. Hannan & László Pólos, 2015. "Organizational Obsolescence, Drifting Tastes, and Age Dependence in Organizational Life Chances," Organization Science, INFORMS, vol. 26(2), pages 550-570, April.
    5. Bersch, Christopher V. & Akkerman, Renzo & Kolisch, Rainer, 2021. "Strategic planning of new product introductions: Integrated planning of products and modules in the automotive industry," Omega, Elsevier, vol. 105(C).
    6. Wochner, Sina & Grunow, Martin & Staeblein, Thomas & Stolletz, Raik, 2016. "Planning for ramp-ups and new product introductions in the automotive industry: Extending sales and operations planning," International Journal of Production Economics, Elsevier, vol. 182(C), pages 372-383.

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    More about this item

    Keywords

    product life cycle; PLC; automotive manufacturers; automobile industry; product policy; competitive analysis; Germany; Italy; France; product innovation; automotive product lines; product line extension.;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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