An Empirical Study on Automobile Imports in 50 U.S. States: Focusing on Korean, Japanese, and German Automobiles

This study intends to compare Japanese automobiles, German automobiles, and Korean automobiles, which are major competitors in the US automobile market, in light of major sales factors, and to draw implications for expanding sales of Korean automobiles in the US. This study compares and analyzes Korean cars, Japanese cars, and German cars by sales factors in the 50 US states instead of country level determinants considered in previous studies. In this respect, it makes differentiated contributions. This study adopts the fixed-effect model estimation using panel data as a research method. First, it performs the estimation using the size of Korean automobile imports, Japanese automobile imports, and German automobile imports as dependent variables. Furthermore, this study estimates the fixed-effect model for Korean automobile imports relative to Japanese automobile imports and Korean automobile imports relative to German automobile imports. According to the research results of this study, the size of imports of Korean automobiles and Japanese automobiles is affected by efficient fuel use or fuel price such as highway fuel efficiency and fuel price. On the other hand, German car imports are not affected by fuel prices and are inversely related with the highway fuel economy. Another finding of this study is that the higher the ratio of fatalities in highway traffic accidents, the lower the Japanese automobile imports. In addition, this study finds that the ratio of single-driver commuting to work has inverse relationship with the German automobile imports. Lastly, it is found that automobile imports from Korea and Japan are found to be affected by overall preferences for products in those countries. Meanwhile, as a result of controlling for major sales factors, Korean cars, Japanese cars, and German cars are equally preferred in California, Florida, Michigan, Virginia, and Rhode Island. In Mississippi, South Carolina, Oregon and Tennessee, Korean and Japanese cars are preferred over German cars while Korean cars and German cars are preferred over Japanese cars in New Jersey, Georgia, and Texas. On the other hand, in Louisiana, Washington, and Pennsylvania, Korean-made cars was found to be remarkably preferred over German and Japanese cars. The results of this study provides a guideline for sales strategy for Korean cars in the US market. This study limits the subjects of imports of Korean cars, Japanese cars, and German cars to 50 states in the United States, and only categorizes cars by production country rather than automobile brands. If these data can be accessed, various studies will be possible in the future.