Academic journal article Management & Marketing

Factors Influencing Consumers' Light Commercial Vehicle Purchase Intention in a Developing Country

Academic journal article Management & Marketing

Factors Influencing Consumers' Light Commercial Vehicle Purchase Intention in a Developing Country

Article excerpt

(ProQuest: ... denotes formulae omitted.)

* An earlier Turkish version of this paper was presented at "15th International Symposium on Econometrics, Operations Research and Statistics" on 22-25 May 2014, Isparta, Turkey

Introduction

The automotive industry has a leading position in emerging economies because of the recent technological developments and significant changes in social life. Automotive industry has an extensive infrastructure and automotive products have relatively high demand from for many various purposes including transportation, production and defence. As the Automotive Distributers' Association and The Economic Research Foundation of Turkey reports (2013), the total endorsement in the automotive industry is equivalent to the sixth major economy worldwide with almost fifty million employees providing a 433 billion euros contribution to all capital budgets.

As an emerging economy, the automotive industry in Turkey plays an important role in the manufacturing sector. However, according to the latest market evaluation of the Turkish Automotive Distributers' Association (2015), the Turkish passenger car and light commercial vehicle (LCV) total market decreased by almost 10% in 2014 with 767,681 units sold compared to 853,378 in 2013. Specifically, the number of LCV sales was 180,350 in 2014 with a 4.44% decrease compared to 2013. The main reasons of market share decline were associated with several indicators such as increases in exchange and interest rates, an increase in car special consumption tax rates, restrictions imposed by the Banking Regulatory and Supervisory Agency toward credit transactions, deceleration in economic growth, and weak private sector consumption and investments (Automotive Distributers' Association, 2015). Fortunately, the results of a very recent survey on nearly 200 automotive executives indicate that a new adjustment of taxes on automobile sales will be the top priority issue in the next five years. Moreover, most of the executives in the Turkish automotive industry foresee a market growth despite a decline of growth rate anticipation (KPMG Turkey, 2014). Another recent report on automotive demand forecast in Turkey (Kircova et al., 2012) exhibits that consumers' automobile demand in Turkey is strictly sensitive to Turkish economic progress. At this point, periodical analyses of consumer behaviour may provide valuable insights for both present and future automotive market policies.

Whilst consumers' automobile purchase decisions have been extensively studied in the existing literature, little research specifically examined their LCV demand. This paper aims to determine the key factors affecting consumers' purchase decisions in an emerging economy with an emphasis on LCV demand. The next section reviews the existing literature concentrating on consumers' purchase decision in the automotive industry. The methodology section gives theoretical information about the conceptual framework of the analysis used in the study. This section also introduces the sample and data collection. The results section interprets the results of the statistical estimations. This paper concludes with a discussion of the results and suggestions for policy makers.

Literature review

There is a fairly large literature considering various aspects of factors that may influence consumers' vehicle purchase intention or decisions, regarding various types of vehicles. Especially, several demographic factors were frequently highlighted as significant contributors to consumers' motor vehicle purchase decisions. Not surprisingly, monthly household or individual income was found as one of the major determinants of consumers' vehicle ownership decisions (Ede and Panigrahi, 2000; Lam et al., 2000; Romilly et al., 2001; Yilmaz, 2001; Choo and Mokhtarian, 2004; Kumar and Krishna Rao, 2006; Potoglou and Kanaroglou, 2008a; Bhat et al., 2009; Nolan, 2010; Prieto and Caemmerer, 2013; Wong, 2013). …

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