Costs a pretty penny: how household income impacts upon motorization in Europe and raises manufacturer branding challenges

• Main Author: Roşca Vlad I.
• Format: Article
• Language: English
• Published: Sciendo 2019-05-01
• Series: Proceedings of the International Conference on Business Excellence
• Subjects: motorization; vehicle ownership; household; public transportation; mobility
• Online Access: https://doi.org/10.2478/picbe-2019-0067

This research starts from the findings of a previous study (Roșca, 2018) and intends to develop the preceding statistical model through testing new and more elaborated hypotheses based on the recommendations for future research made in the aforementioned work. The current paper tests demographic and transportation related variables for a multiple regression carried out at a confidence level of 95%. Regression results show a valid relationship between motorization and the selected regressors. Findings further reveal that motorization rates are most strongly influenced by the gross disposable income of households per capita (H4, β = 0.010, p = 0.000). Given that three of the demographic and transportation related research hypotheses have not been supported (age, overcrowding, fatalities), it might be argued that motorization should be looked upon more as a market(ing) feat rather than as a social or psychological fact. Car manufacturers should invest more in branding and in market segmentation in order to address the right target groups and properly position themselves with the customers. Branding, hence, becomes important as it creates an emotional connection between the corporate identity of the producers and the image that customers share about it. The closer the brand identity is to the brand image, the more of an impact the brand will have upon customers to spend part of their gross disposable income for car purchases. Starting from the main finding, this article also claims that future research needs to insist more upon the economic determinants of motorization (e.g. inflation, poverty rate, available resources, unemployment rate, interest rate etc.) and to determine their influence on brand preference and car ownership. At the same time, some other demographic variables such as age or generation could be double-checked, as researches provide shattered views upon their role: while some hold them as influential, others subjugate them to the economic determinants.