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Title: | PRICE AND QUALITY COMPETITION IN THE NEW CAR MARKET | Authors: | LIEW WEI QIANG DANNY | Issue Date: | 2012 | Citation: | LIEW WEI QIANG DANNY (2012). PRICE AND QUALITY COMPETITION IN THE NEW CAR MARKET. ScholarBank@NUS Repository. | Abstract: | This paper investigates the impact of Certificate of Entitlement (COE) prices, product innovation and brand equity on the market shares of automobile firms in the Singapore new car market. Under the vehicle quota system (VQS), buyers of new cars must bid for a COE which adds to the total price of the car they are paying for. I construct an attraction model to test the hypothesis that increasing COE price will cause premium brands to gain market share in the Singapore new car market. The results show that, in accordance with Weber-Fechner's Law, increasing COE prices do lead to market share gains for premium brands. Using the same attraction model, I investigate how product innovation by an automobile firm increases the attractiveness of the brand and increases the firm's market share. Product innovation indeed has a significantly positive relationship on the market share of automobile firms in Singapore. Lastly, I apply the model to find the effect of brand equity on the market share of an automobile firm. I find that firms holding major market shares derive their market share advantage from their significant brand equity and that brand equity changes over time have a minimal impact on a firm's market share. | URI: | http://scholarbank.nus.edu.sg/handle/10635/147655 |
Appears in Collections: | Bachelor's Theses |
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