A disaggregate choice Model for Iranian customer car selection, a behavioral perspective

Modeling consumers' behavior is a key aspect of demand analysis where the consumer's behavior is typically disaggregated. The purpose of this study is to develop a choice model for the Iran car market and to explore the relationship of indigenous & endogenous factors to individuals' vehicle choice behavior. We have developed a disaggregate choice model of body type (VET: Vehicle Body Type) based on selected market specific factors (Consumer Critical Expectations, Car Critical Characteristics, Sales Methods, Country of Origin and Brand), as well as typical demographic variables. The developed model used to explore customer choice for VBT from a survey conducted in Tehran for new car buyers. The Multinomial Logit (MNL) model developed in our paper indicates the utility value and choice elasticity of Iran customer choice behavior for VBT selection and explores the effect of segmentation of customers. The results improved the model estimation procedure to reduce complexity and time of modeling. The results provided bring a new insight for car manufacturers and marketing departments for market planning. Finally, analysis of the preference behavior of customers can help for urban planning and policy setting for public transportation, car ownership that affects traffic congestion, and energy consumption.