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4 years ago

the impact of the cash for clunkers program on customer loyalty

the impact of the cash for clunkers program on customer loyalty

ong>programong>s in ong>theong> US and Germany. In our model we also include an arrow between consumer loyalty and long-term effects which will be analyzed more so in ong>theong> analysis section ong>ofong> this research. Figure 1. Consumer loyalty in ong>theong> Automobile Industry. Source: ong>theong> authors This model gives a broader understanding ong>ofong> consumer loyalty than previous models, which neglect ong>theong> governmental aspects that affect loyalty. It is likely that oong>theong>r models do not include governmental policy because governmental encroachment in ong>theong> economy may be rare or because it is not something that can be easily changed as, ong>forong> example, a business strategy. In industries oong>theong>r than ong>theong> auto industry where companies are ong>ofong> smaller size, this model may be ong>ofong> less importance because small companies would not be able to influence governmental decisions and policies as ong>theong> companies in ong>theong> auto industry are able to. The ong>impactong> ong>ofong> ong>theong> ong>cashong> ong>forong> ong>clunkersong> ong>programong> on consumer loyalty The figures below illustrate ong>theong> market shares ong>ofong> ong>theong> domestic brands within ong>theong> German and ong>theong> US market. Figure 2 and Figure 3 provide a long-term overview ong>ofong> ong>theong> market share from 2005 to 2010, where by Figure 4 and Figure 5 focus on ong>theong> months when ong>theong> CARS and ong>theong> UMWELTPRAEMIE ong>programong>s were ong>ofong>fered to consumers. The figures illustrate that ong>theong> ong>programong> had a significant ong>impactong> on ong>theong> proportion ong>ofong> domestic brands sold throughout ong>theong> period.

Figure 2. Market share ong>ofong> domestic brands in ong>theong> US Automobile Market (2005-2010) - Source: (WardsAuto, 2011) Figure 3. Market share ong>ofong> domestic brands in ong>theong> German Automobile Market (2005-2010) - Source: (KFZ-Auskunft, 2011) Figure 4. Market share ong>ofong> domestic brands in ong>theong> US Automobile Market (Apr 2009 – Nov 2009) - Source: (NADA, 2011) Figure 5. Market share ong>ofong> domestic brands in ong>theong> German Automobile Market (Oct 2008–Dec 2009) Source: (VDA, 2011) The market share ong>forong> domestic brands in both countries dropped during 2009, which was ong>theong> year when ong>theong> ong>cashong> ong>forong> ong>clunkersong> ong>programong> took place. Initially, domestic automakers in both countries had been supportive ong>ofong> ong>theong> ong>programong>s and ong>theong> ong>programong>s did increase sales ong>forong> domestic brands. However, ong>theong> sales ong>ofong> ong>forong>eign brands increased by much more. In ong>theong> US ong>theong> domestic firms had been steadily losing market share ong>forong> quite some time. The data shows that in 2009 ong>theong>re was a large drop in market share, which somewhat recovered after ong>theong> ong>programong> had ended. In Germany ong>theong> market share ong>ofong> domestic brands had been relatively more stable but again, a large drop in market share in 2009 appeared followed by a recovery after ong>theong> ong>cashong> ong>forong> ong>clunkersong> ong>programong> was concluded. The previous figures show market share in ong>theong> industry including all car sales. Limiting ong>theong> figures to include market share ong>ofong> cars bought and traded in during ong>theong> ong>programong>, ong>theong>y appear to be even more extreme. 7

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