An Analysis of Japanese Automobile Market in Market Equilibrium

Analyzing consumers’ product preferences has become more powerful tool as information technology progresses and marketing methods improves. Using POS data, we can analyze consumers characteristics and their diversity. In many cases, however, we may not be able to get hold of the individually-based micro data. In this paper, we empirically analyze Japanese automobile market using market-level aggregate data under market equilibrium. We use the random coefficient logit model to allow flexibility in substitution patterns. We found that consumers, on average, seem to prefer vehicles belonging to mini vehicle category. However, there are no significant heterogeneity in almost all the variables.