Country of Assembly (COA) effect on perceived automobile quality: a Thai consumers' perspective
Abstract:Trends in multinational production have complicated the issue of country of origin (COO) with products now often associated with more than one COO and no longer produced in the same country as where they were designed or where their major components originate. This leads to a new stream of COO studies being termed "hybrid product research".
This paper studies the impact of assembly location on Thai consumer perception of automobile quality. While automobiles assembled domestically (CKD) are considerably cheaper, COO studies have reported that consumers prefer automobiles assembled in highly industrialised countries (CBU). Two surveys were conducted with 186 respondents in Bangkok, Thailand. It was found that a brand with a strong quality image could reduce COA bias when evaluating automobiles from a country with a negative quality image. Consumer ethnocentrism was also studied to determine whether it can play a role in consumers' evaluation of domestically assembled automobiles (CKD). The result, as expected, revealed that ethnocentric consumers exhibit their home country bias by championing locally assembled automobiles. As expected, ethnocentric consumers were found to have lower education achievements and live in larger households but age and income were found to have no bearing unlike previous research. Following these findings, conceptual and practical implications were discussed. This study supported previous research findings and provided two new research scales. Meanwhile, practical implications for automakers are that they need to weigh up the benefit of relocating their assembly plants against a very likely reduction in perceived value due to associations with a country's negative quality image.
Document Type: Research Article
Publication date: July 1, 2009