Do I have to buy it now? A vehicle replacement model considering strategic consumer behavior

摘要

This study proposes a vehicle replacement model that considers consumers' strategic decision-making for the optimal purchase timing of a new vehicle. The model incorporates the effect of the currently owned vehicle (status quo) and future vehicles with different performance and market situations on consumers' current purchase decisions. By identifying purchase timing, the model endogenously identifies new vehicle buyers for each period and derives the expected sales and stock share of the market. Choice experiments were conducted among 333 South Korean vehicle owners in 2018, and the results were applied to a simulation framework to forecast the future vehicle market (2018-2030). The proposed model showed significantly different results compared to models that ignored the effects of status quo and future vehicles on current purchase decisions. The key findings are as follows. First, consumers tend to prefer the same vehicle type as their status quo vehicle. Second, consumers tend to postpone their purchase of electric vehicles more than they do in the case of conventional vehicles, and they may delay or advance their purchase to the start or end of policies. Finally, market sales expand or shrink based on the existence of and the start or end timing of the policy.