Fighting fire with fire: The impact of radical automotive facelift decision on sales

作者：Luo, Wanting; Xiao, Shengsheng^*; Zhang, Xiaorong

来源：EXPERT SYSTEMS WITH APPLICATIONS, 2023, 234: 121078.

DOI：10.1016/j.eswa.2023.121078

• Automotive facelift
• Decision support
• Bayesian structural time series model
• Synthetic control
• Automobile sales

Because of the increasing fierce competition among automakers automotive facelift has become a common and popular market practice. However, very limited attentions have been paid to the impacts of this action due to its independence and uniqueness for each car model. This study is to examine the effects of automobile facelift on sales. We take GM's aggressive Three-Cylinder Engine replacement on Excelle model in China as an example, and employ a Bayesian structural time series model (BSTS) to conduct the counterfactual estimation of the impact by synthesizing the sales of competing models. After calibrating the proposed model with a proprietary panel dataset that includes real sales of all the selected cars from January 2017 to June 2018, we find that (1) The three-cylinder engine replacement resulted in an overall decrease of 13,000 in Buick Excelle's sales and a decrease of about 30% in relative terms. (2) Moreover, this facelift event has a negative impact on sales overall trend. In the short term, it has an upward trend compared with a downward trend in the long term. Our study provides a new method to quantify the impact of automotive facelift on sales and the findings have managerial implications for automakers.