Product Differentiation From The Perspective Of Chinese Family Sedan Market Research

Automobiles are differentiated products. The market researches for the typically differentiated products would not reach reliable conclusions if heterogeneity presumption was not considered. However, most previous researches of Chinese automobile market, domestic or abroad, were based on homogeneity presumption. Generally, the perspective of product differentiation differs significantly from traditional one on the models they apply—the former applies characteristics space models while the latter product space models. For the analysis of the demand system in the characteristics space, discrete choice models were generally necessary. The earlier developed discrete choice models, while used in market researches, would have the limitations such as IIA or a prior sequence of consumers' choices. Random coefficient logit models, developed in the last decade, do not have the limitations of multinomial logit models or nested multinomial logit ones, so, they are more suitable for the market researches from the viewpoint of product differentiation. Besides, of all submarkets of Chinese automobile market, Chinese household car market was the largest one at present, and it expanded fastest and it would keep the fastest expanding speed. This dissertation, applied random coefficient logit model, studied several issues of Chinese household car market systematically from the perspective of product differentiation.This dissertation can be divided into four parts, firstly a framework of automobile market researches from the perspective of product differentiation was provided; secondly, the competition pattern of main brands in Chinese household car market was studied; thirdly, demand of household car market in China in the coming 10 years was simulated; fourthly, the short run and long run effects of Chinese Fuel Consumption Limit Standard (FCLS) on Chinese household car market was estimated.Based on 815 samples from household survey and other open resources, this dissertation focused on the 17 main product brands, which account for more than 50% of household car market in China. The studies of consumers' choice in Chinese household car market were scattered in Chap.4, Chap.5 and Chap.6. Different consumers' choices would be modeled according to different study objects. The results show that, the difference between brands on purchase price and some product attributes, such as fuel consumption, model size, acceleration performance, origin of brand, luggage space, would influence the consumers' choices among the main product brands. And, the difference between grades on purchase price and some product attributes, such as fuel consumption, model size, shoulder room, would influence the consumers' choices among the product grades, which according to engine size.Chap.4 mainly dealt with the analysis of competition pattern among main product brands in Chinese household car market. According to the particular social-demographic characteristics of the households or household heads, it segmented the market composed by main product brands in Chinese household car market. With estimation of self demand elasticity relative to the particular product attributes, it analyzed the effects of the improvement of particular product attributes on the demand of the main brands, and it forecasted the effects of the non-price competition strategy adopted by the particular manufacturers. With calculation of self price elasticity, it forecasted the effects of the price competition strategy for the main manufacturers. With calculation of cross price elasticity, it nailed down the main competitors for those main product brands in Chinese household car market, and found that, except from the competition between Elysee and Fukang, inside competitions among the different product brands in the same make were not obvious in Chinese household car market.Chap.5 simulated demand of Chinese household car market in the coming 10 years. Given base case inputs, it found that, in the future 10 years, the relative proportion of the demand of the cars with lower and medium displacement would continuously drop, and the one with higher displacement would rise continuously in Chinese household car market. The growth of household's annual gross income and the gap of household's income, however, would be sensitive to the simulation results of the elasticity of demand structure. In addition, according to the study of the subsidy policy from government to new product developing behavior relative with energy-efficient cars or less environment-polluting cars, it found that, the subsidy from government would be effective to induce the products to be more energy-efficient. It also found that Market mechanism only wouldn't make cars smaller, so it would be necessary to impose taxes for the cars with large model size.Chap.6 estimated the effect of Chinese Fuel Consumption Limit Standard (FCLS) for passenger cars on Chinese household car market. It found that, once FCLS was put in practice completely, the fuel consumption of an average model in Chinese household car market would drop about 3.72 percent in the short run. Provided that the growth ratio of annual gross income of an average Chinese household was 5-7 percent, in 10-20 years after FCLS was put in practice, the fuel consumption of an average model in Chinese household car market would drop 2.47-2.97 percent. It also concluded that, the fuel tax would not consequentially lead to the reduction car use in the long run.According to literature, few domestic market researches from the perspective of product differentiation was found. This dissertation made advancement in the following two aspects.Firstly, it systematically studied Chinese automobile market from the perspective of product differentiation for the first time, and it focused on the some important issues about Chinese automobile market which had not been studied in depth. Most of the domestic market researches based on the assumption that the products were homogeneous, and they generally applied product space models. From the homogeneity perspective, it would be hard to study deeply some important issues about Chinese automobile market, such as the effects of non-price competition strategy or price competition one adopted by manufacturers, the change of the structure of the demand of automobile market, the effect of FCLS. It had some advancement about the above issues from the perspective of product differentiation and with characteristics space models applied.Secondly, with the disaggregate demand modeling method and random coefficient model, it studied the new field, and it had separately built consumers' choice models according to different research objectives. In China, there was a few studies adopted disaggregate demand modeling method, and mostly in transportation behavior researches. Besides, few empirical studies with random coefficient model were found in China. And, in the previous market researches from the perspective of product differentiation, the principle of the modeling for consumers' choice had not described clearly.It was an exploring study, which had some limitations. The precision of the measurement of some of data, and the randomization of the sampling process, and the generalization of its conclusions to the studies of other markets, need be improved in the future studies.