Title: Consumer attitudes and automotive transactions: the difference between new-car and used-car markets in Japan

Authors: Masataka Morita, Kiyohiko G. Nishimura

Addresses: Faculty of Economics, Meiji Gakuin University, 1-2-37 Shirokanedai Minatoku, Tokyo 108-8636, Japan. ' Member of the Policy Board, Bank of Japan, Japan

Abstract: This paper examines the possible impacts of changing consumer attitudes on the use of new information and communication technology and its results on the terms and conditions of automobile transactions, by integrating a used-car market study and a new-car market study into one coherent study. We find that consumers who are active in information gathering and terms-of-trade negotiation are able to obtain larger price discounts on new cars and higher trade-in or sell-off price for their own cars. There is synergy between internet usage and active information gathering. However, data also reveals limited rationality on the side of consumers: their negotiation strategy (hard-pressing on new car prices but less aggressive on sell-off prices) is suboptimal. Also, even though we are in an information age, human factors are shown to be very important in negotiation.

Keywords: consumer attitudes; information technology; communications; ICT; new-car markets; used-car markets; synergy; limited rationality; survey analysis; automotive transactions; automobile industry; pricing; negotiation strategy; human factors; consumer behaviour; Japan.

DOI: 10.1504/IJATM.2006.008937

International Journal of Automotive Technology and Management, 2006 Vol.6 No.1, pp.80 - 114

Published online: 03 Feb 2006 *

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