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.
