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

Author： Volpato Giuseppe Stocchetti Andrea

ISSN： 1470-9511

Source： International Journal of Automotive Technology and Management, Vol.8, Iss.1, 2008-06, pp. : 22-41

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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.