Designing the Future
Fewer redesigned models may explain some automakers' woes
As three economists at Virginia Commonwealth University School of Business have postulated in a new paper (and as The New York Times' Wheels blog reports), the Big Three automakers may not have lost market share mainly due to lack of innovation or safety features, but because they failed to redesign their vehicles often enough.
Looking at the period from 1995 to 2006, the economists found that Japanese manufacturers restyled their vehicles an average of once every three years; American carmakers, on the other hand, restyled only every four years. The paper posits that this, more than any other factor, explains the 25.5 percent market-share loss that American manufacturers suffered during this time period.
The paper notes that American carmakers used frequent restyling to force independent carmakers (like Packard) out of the post-war marketplace, and suggests is that buyers respond to restyling more than to advertising or even price cuts -- the economists calculated that a 10 percent reduction in (relative) price “would yield only one-tenth the market-share impact of a restyling.”
What are your thoughts? Would you rather see more models over lower prices, incentives or safety features?
(Pictured: The redesigned 2010 Ford Taurus.)
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