Title: Managing product life cycle in the auto industry: evaluating carmakers effectiveness

Authors: Giuseppe Volpato, Andrea Stocchetti

Addresses: Faculty of Economics, Department of Business Economic and Management, Ca' Foscari University, S. Giobbe – Cannaregio 873, I-30121 – Venezia, Italy. ' Faculty of Economics, Department of Business Economic and Management, Ca' Foscari University, S. Giobbe – Cannaregio 873, I-30121 – Venezia, Italy

Abstract: This article analyses the evolution of Product Life Cycle (PLC) policies of main carmakers in the three main European markets (Germany, Italy and France) through sales data regarding 212 models of 13 major carmakers for the period 1970–2006. A subsample including more detailed data (sales and features) of 125 car models along the period 1984–2005 has been investigated with the aim of comparing the effectiveness of product innovation and product line extension. According to our results, PLC is getting dramatically shorter, but the reduction does not apply to maturity and saturation phases. Carmakers tend to support sales with a policy of product line extension, while no evidence of effectiveness of such policies emerges. Product innovation seems related to increase in sales, although the introduction of new models and versions is generally delayed with respect to the optimal Life Cycle (LC) timing.

Keywords: product life cycle; PLC; automotive manufacturers; automobile industry; product policy; competitive analysis; Germany; Italy; France; product innovation; automotive product lines; product line extension.

DOI: 10.1504/IJATM.2008.018766

International Journal of Automotive Technology and Management, 2008 Vol.8 No.1, pp.22 - 41

Published online: 16 Jun 2008 *

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