Could Restyling Be the Key to Selling Cars?

What if the conventional wisdom about Detroit’s market share loss is wrong?

So argues a group of economists from Virginia Commonwealth University. In their paper “Non-Price Determinants of Automotive Demand: Restyling Matters Most” published in the Journal of Business Research, they argue that Detroit’s share of the auto market has fallen from 73% in 1996 to just 47% in 2008 because the Big Three don’t restyle models often enough.

During the period of decline from 1995-2006, Japanese automakers restyled their vehicles every third year on average; Detroit averaged four years per vehicle restyling. According to the report, this discrepancy “better explains the 25.5 percent market-share loss for domestic manufacturers over this period than more-often cited factors such as reliability differentials as cited by Consumer Reports.”

That’s a bold explanation, and the report goes further in suggesting that Detroit’s path back to profitability is through restyling instead of price cuts, advertising and even additional safety equipment. They claim a 10% relative price cut would have only a tenth of the impact on market share as restyling a vehicle does.

This doesn’t mean that automakers should jettison vehicle line names because rebranding — such as when Ford briefly dropped the Taurus name — has an “adverse market impact.”

Design Is the Key to Detroit’s Future, Study Says (Wheels)

Comments

I have always felt that the look of a vehicle will pull people in first rather than a brand name or price. Some of the cars out there from the domestics are just plain and boring. I think ford has seen a resurgance because their vehicle have a little more style than their domestic countparts.

I agree that styling, rather than CR's reliability projection, is the major determining factor in most vehicle purchases. Back in the 50's and 60's cars received major re-works yearly. I would think with modern technology significant re-styles every two or three years at least would make the domestic models much more competitive in the marketplace, and would not cost a ton to do.

i think these guys are on target. the domestics tend to let a vehicle stagnate for long periods of time until slumping sales not only demand a major redesign, but they often feel compelled ditch the name as well due to the poor sales that their neglect has caused. the only time a new name should be required is when a completely new type of vehicle is being introduced. you don't see the imports ditching names...

Cody-
You're right! I was riding in my neighbor's Toyota Cressida, (or was it his Subaru Justy?) when we passed a VW Rabbit/Golf, which had just hit an Acura Legend. It reminded me of an old Datsun I had seen get in an accident with a Mazda 626. It made me really glad that Volvo never got rid of the 240, 850, 960, or any other model name they've ever used.

Dan, me and my Kia Spectra appreciate your comments.

Dan,

Are you sure it wasn't the Tercel next to the Paseo by the Celica you were talking about?

Perhaps it might have hit that Vanagon near the NSX or the CRX close to the 323 by the Millenia.

Yes, people like new things, even if it is the exact same car underneath.

This article is right on, here are just two examples: Ford Taurus sales dropped nearly 50% when they went to the oval look in the 80's. They lost first place in car sales and have trailed ever since. The Five hundred introduced some 20 years later languished on dealer lots even though it was a pretty good vehicle. Ford finally got it right with the Fusion!

hmm....there are plenty of examples of long running nameplates. honda accord and civic. toyota camry (i think it might have been the crown in the 80s) and corolla. nissan sentry, altima, and maxima. hyundai sonata, elantra, and accent. subaru legacy and impreza.

if you disagree that name recognition isn't important, just say so. no need to be a jackass.

I think the name is important, as is fresh styling. I've gone back and bought Accords four times, and each time the car has been quite different, yet there is still a familiarity about it. It's like you're getting the best of both worlds. New styling as well as a familiar feel; the fact that you don't have to re-learn every knob and button is very comforting when driving a new car.

"...you don't see the imports ditching names..."

You made a generalization and they're just calling you out on it. Nobody said that name recognition isn't important.

as if there was a need to be 'called out'. what are they, the blog police?

welcome to blog commenting guys.

I think the study is independent of new names. They're basically saying shiny new things sell better than old faded things. Which isn't exactly rocket science. It's just very hard to redesign and even restyle a car in 3 years.

Taurus was extremely popular in the 1980s though so I have to disagree with the abvoe commenter. The Oval look came in the late 1990s and then they barely updated it for years until the 500/Fusion decision to make it two models, not one.

This implies the Camry is selling better than US cars due to styling. I don't understand. If you check bland and / or boring in the dictionary there is a picture there of a Camry, not any of the US car firms! (There is an Aztec with ugly, but that should not shick anybody...)

I think MB / BMW / Audi are on 4 year cycles. I doubt anyone will be able to hold their hand up and say 'yes, I would rather have a Toyota than a Merc'...