Business Research

The current issue and full text archive of this journal is available at www.emeraldinsight.com/1355-5855.htm

Brand and country of origin valuations of automobiles

Kandapa Thanasuta, Thanyawee Patoomsuwan, Vanvisa Chaimahawong and Yingyot Chiaravutthi

Business Administration Division, Mahidol University International College, Salaya, Thailand

Abstract

Purpose – The purpose of this paper is to quantify the value of brands and countries of origin in monetary units. The automobile industry in Thailand is chosen because of the variety of brands and the intense competition within the industry. Both the pick up truck and passenger car market shares have been dominated by Japanese brands for decades, whilst the luxury market has been dominated by German brands. Design/methodology/approach – The data are collected from an authors’ survey carried out during the ‘‘Thailand International Motor Expo 2007’’. A total of 244 models are chosen from 20 brands, and from 7 countries of origin. The hedonic price model is applied to ascertain the price premiums of these different brands, taking into account their countries of origin, since each automobile brand offers several models with distinguishably different features. Findings – The results indicate that different brand names affect consumers’ ‘‘Willingness to Pay,’’ in which Mercedes, BMW, and Audi brands are ranked the highest. Surprisingly, Subaru, Mitsubishi and Toyota are the only Japanese brands to have significant brand values. The findings also illustrate a direct relationship between market acceptance and the price premium for automobiles in the luxury car segment, however the same relationship does not hold true for the cars in economy car segment. It seems that Thai consumers put the highest value on cars from Germany, whilst cars from Japan and the USA possess approximately the same value. Korean and Malaysian cars, which focus on lowprices as a means to obtain a competitive advantage, are as to be expected...