DEMAND ORIENTED POLICIES FOR IMPROVING MARKET SHARE IN THE U.S. AUTOMOBILE INDUSTRY

In the post World War II era, the U.S. automobile industry's initial dominance was followed by a period of rising foreign competition and market share decline. Two intervening fuel crises during the seventies hastened market share redistribution towards manufacturers with a competitive advantag...

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Bibliographic Details
Published in:Rivista internazionale di economia dei trasporti 1991-06, Vol.18 (2), p.151-166
Main Authors: TAY, RICHARD S., Mc CARTHY, PATRICK S.
Format: Article
Language:English
Subjects:
Automobiles
Automotive industries
Capital costs
Foreign cars
Fuel efficiency
Horsepower
Market share
Motors
Operating costs
Station wagons
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Summary:In the post World War II era, the U.S. automobile industry's initial dominance was followed by a period of rising foreign competition and market share decline. Two intervening fuel crises during the seventies hastened market share redistribution towards manufacturers with a competitive advantage in lighter more fuel efficient vehicles, specifically the Japanese. Although more than a decade had elapsed since the last crisis, the U.S. continues to experience strengthening competitive pressures. Using data collected by a 1985 nation wide survey of new car buyers, this study analyzes the determinants of market demand and identifies demand oriented policies which are most likely to benefit domestic producers. Changes in vehicle safety, exchange rate variations, consumer preferences, and fuel efficiency are found to have the most favorable effect on domestic market shares. On the other hand, policies related to fuel price changes are found to be relatively less effective for improving domestic market shares.
ISSN:0303-5247