Chapter 5

Chapter 5. Consumer’s
Purchase Intentions
towards Automobiles in
Pakistan
Abeera Amir*, Muzaffar Asad
School of Accounting and Finance, University of Central Punjab, Lahore, Pakistan
Email: *beya_amir@hotmail.com

Abstract
The purpose of this paper is to identify and assess the factors which influ-
ence the consumer’s purchase intentions towards automobiles in Pakistan.
After reviewing the literature, the most significant independent variables
(price, product, after sale service, brand product quality and brand loyalty)
were integrated together into a research framework and then the hypotheses
were tested. The unit of analysis was the individual automobiles consumers
in Lahore, Pakistan selected as random respondents. The sample size was
250. Simple regression was used to analyze the results. The findings de-
picted that the three independent variables—price, product and brand
product quality— have a positive significant relationship with the consum-
er’s purchase intentions towards automobiles while the other two variables
i.e. after sale service and brand loyalty showed insignificant results. The
managers in the automobile industry as well as the policy makers will find
this study helpful, when they will be making strategies (example marketing
related) and also while developing auto policy.
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Keywords
Purchase Intentions, Price, Product, After Sale Service, Brand Product
Quality, Brand Loyalty

1. Introduction

In recent years, an exceptional development and progress can be wit-

nessed in the number of passenger cars on the roads all around the world.
The advancement of the automobiles has not only made great contribu-
tions to the economic development of a country but also considerably
changes people’s life [1]. Clearly, the automobile industry has entered in
the race of innovation and technology. It is repeatedly mentioned by var-
ious authors that the automobile industries are the key players in contrib-
uting to the growth of the GDP in various developed nations. According
to the PAMA (Pakistan Automotive Manufacturers Association), the total
production of the passenger cars (2017) were 186,936 while the sales fig-
ures shown were 185,781. If we see the production figure of passenger
cars in 2016, it depicts the value of 179,944 and the sale figure is 181,145
passengers’ cars. Hence, it is evident that the overall the production and
also the sale of the cars have been increased from the year 2016 to 2017.
These figures only include the passenger cars. There are other categories
of automobiles for example trucks, buses, vans and jeeps (4 × 4) and farm
tractors; they have also shown a sharp increase in the sales and produc-
tion figures (PAMA). Hence, it is evident that overall roads have been
flooded with vehicles.

In every country, the automobile industry plays a vital role in the

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economy. Taking Pakistan, into consideration then based on the facts that
Pakistani automobile industry is not much prominent in the world. It is
rather expanding in Pakistan from a long time. [2] narrated that there is a
hope that the customers are more likely to repurchase the product if they
are “satisfied customers” which will expand the market share of the
company as well as its overall sales. This shows that company can be-
come profitable if it can satisfy its customers. Satisfaction is a fulfillment
of the needs and desires of consumers and thus consumers will repeat
purchase Customers when they are satisfied with the experience of the
process of purchase or after they consume the goods [3]. Companies
providing high quality goods and services might convince the consumers
and hence individuals may trust the company to be a profitable invest-
ment as well [4]. Before, purchasing the product, the consumers gather
the information related to the products and reaches on certain decision
and therefore purchase intention is often used to analyze consumer be-
havior [5].

At present, the Pakistani auto market is dominated by Suzuki, Honda

and Toyota. According to various studies, the growth in the economy can
be witnessed by the success of the Automobile industry. It also provides
job to the millions of people and it may also support other industries.
However, in recent years, there has been a change in the preferences of
consumers towards the passenger’s cars. Consumers choose to purchase
an imported cars rather than locally manufactured cars which has affected
the local automobile industry of the Pakistan. The import of the automo-
biles in Pakistan has been escalated as people have shown their keen in-
terest towards the imported cars. Due to different culture, attitude of
consumers and moreover the tastes of the consumers vary from one
country to another [6]. Currently, people have more choices and alterna-
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tives in purchasing the cars than before.

In response to this problem, this study proposes to assess and investi-

gate the important variables that influence the purchase intentions to buy
imported cars rather than buying locally manufactured cars among con-
sumers in Pakistan. After investigating the literature, the most significant
variables have been selected which are price, product, after sale service,
brand product quality and brand loyalty [7] [8] [9]. Hence, all these fac-
tors will be inculcated in the research article. The paper investigates the
relationship of all these factors with the consumer’s purchase intentions
towards buying the imported cars rather than locally manufactured cars.

2. Literature Review

Several researches have been supervised in recent years in both develop-

ing and developed countries to analyze and investigate the purchase in-
tentions of automobile consumers. One of the particular aspects of auto-
mobile industry is that it constitutes the demand for the raw materials,
servicing and distribution leading to a major rippling effect in the econ-
omy [10]. Moreover, to assess the purchase intentions of the consumers is
very critical as it will help the automobile companies to know about their
products worth and behavior of the consumers towards their products.
Furthermore, the managers and automobile policy makers will also be
benefited. The managers will have better knowledge about the consumer
purchase intentions then they can describe the elements which influence
behavior of the consumers and also the Policy makers in Pakistan’s auto
sector would benefit [7].
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To best of my knowledge, there is no study yet produced by the vari-

ous researchers who have accommodated all these variables (product,
price, after sale service, product quality and brand loyalty) altogether and
have investigates the relationship of all these factors with the purchase
intentions of the consumers in Pakistan. Henceforth, this study is moti-
vated to be one of the first studies of said kind aiming to assess the influ-
ence of these factors on purchase intentions.

The purchase intentions of the consumers are related to the consumer’s

readiness to acquire. Purchase intention is part of the behavioral inten-
tions and henceforth, the behavior of the consumer can possibly be turned
into course of certain action [11] [12]. The theory of planned behavior
has been assessed and the variables that was investigated were attitude,
Environmental Consciousness, Environmental Ethics and Beliefs, Social
Impression, Perceived Behavioral Control, Subjective Norm [13]. This
study attempts to extend the behavior and intentions model i.e. theory of
planned behavior by including the all the five independent variables
(price, product, after sale service, brand product quality and brand loyalty)
and investigating its combined effect on the intentions and behavior of
the consumers. In Pakistan, as it evident that the purchase of the cars has
reached at its highest levels so that also explains that behavior of the Pa-
kistani consumers towards the automobiles. The impact of price, brand
and store information on consumer’s judgment about the product quality
and their willingness to buy was assessed [9]. Consumers are influenced
by word of mouth communications and make purchase decisions. The
study on e-word (electronic-word) of mouth was conducted to examine
its influence on the brand image and purchase intentions [14]. On the
other hand, [6] analyzed the variables i.e. country of origin and the criti-
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cal function country of origin and assessed its impact on the consumers’
automobile purchase decisions. The variables used in his study were price,
quality requirements of the product, risk and social factors.

Another research investigated the impact of self image congruence,

perceived corporate brand origin and corporate-brand credibility on pur-
chase intention [15]. The variables attitude, subjective norms, perceived
ease of use and perceived risk were analyzed to identify its impact on
purchase intentions [7] [16]. has also identified and assessed the key var-
iables which have significant impact on the purchase intentions to pur-
chase passenger cars among consumers in Pakistan. The variables of their
study were product, price and after sale service. Consequently, [8] inves-
tigated the Aaker’s consumer based brand equity model and expanded it.
The independent variables used in the study were brand association,
brand product quality, brand loyalty and after sale service. Another re-
search inculcated country image, product quality and brand familiarity as
independent variables in the study [17]. Brand experience, brand trust and
affective commitment influence purchase intentions was another research
[18]. Moreover, in another research, the mediating role of product judg-
ments has also been tested before along with the consumer ethnocentrism
and animosity as independent variables [19]. Another research investi-
gated the effect of attitude, social pressure, perceived behavior control
and perceived self identity on purchase intention [20].

Most of the researchers working on the consumer purchase intentions

have performed causal research, where they have seen the impact of key
factors on the purchase intentions [7] [14] [19]. In this area of domain;
researchers have found contrasting results. [9] marked that there is a neg-
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ative impact of price on perceived willingness to buy but there is a posi-

tive relation between price and perceived quality; moreover, other two
variables (brand and store information) showed significant results to-
wards the perceptions of quality and willingness to buy. [6] observed that
the factors i.e. quality and social factors have significant relation with
purchase intentions. [7] identified that product, price and after sale ser-
vice have significant impact on the dependent variable (i.e. purchase in-
tentions).

Theoretical Framework

Preceding literature has produced similar outcomes but some variables

need to be further analyzed. In the current study, the purpose is to assess
the consumer’s purchase intentions especially in terms of buying import-
ed cars instead of locally manufactured cars in Pakistan. The literature
has also identifies various factors of the purchase intentions. Some of the
factors are price, quality requirements of the product, risk and social fac-
tors, self image, perceived corporate brand image and corporate-brand
credibility, price and after sale service, brand value and brand loyalty and
Word of Mouth communication etc. the proposed research framework
was established which was based on the above discussion (Figure 1). The
study incorporated five independent variables which are the most signifi-
cant, i.e. price, product, after sale service, brand product quality and
brand loyalty in finding their relationships with purchase intentions (PI).

Based on the proposed research framework, several hypotheses are

tested as follow:

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H1: Price (P) has a significant impact on the purchase intention (PI)

Price

After sale service

Purchase
Product Intentions

Brand product quality

Brand loyalty

Figure 1. Proposed research framework.

H2: After sale services (AS) has a significant impact on the purchase
intention (PI)

H3: Product (PD) has a significant impact on the purchase intention

(PI)

H4: Brand product quality (BP) has a significant impact on the pur-
chase intention (PI)

H5: Brand loyalty (BL) has a significant impact on the purchase inten-
tion (PI)

3. Methodology

The collection of the data for the purpose of the survey has been done
through questionnaire. Table 1 shows the items along with its sources.
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The five point likert scales ranging from strongly disagree to strongly was
used in all the items. The unit of analysis of the study was the individual
consumers of automobiles in Lahore, Pakistan. The respondents were
both male and female between the age group of 29 to 50 years old. A to-
tal of 326 responses were gathered out of which 76 responses were ne-
glected because of incomplete questionnaires, thus leaving 250 responses.
Hence the overall response rate was 76%.

Table 1. Questionnaire source and number of items.

Constructs Items Source

Purchase intentions 7 Theo et al. (2008) and Ekam (2013)

Yoo, et al. (2000), Ahmad and

After sale service 6
Butt (2012) and Al-Dmour et al. (2013)
Yoo, et al. (2000), Ahmad and
Price 7
Butt (2012) and Al-Dmour et al. (2013)

Product 12 Raoof (1997)

Brand loyalty 4 Sajjad Ahmad and Muhammad Mohsin Butt, (2012)

Brand product quality 5 Sajjad Ahmad and Muhammad Mohsin Butt, (2012)

The data was then analyzed on the SPSS software to run the regression
for the purpose of finding the impact of predictors on the response varia-
ble. The equation formed on the basis of the proposed framework is :-

Y = β o + β1price + β 2 after sale service + β3 product

+ β 4 brand product quality + β5 brand loyalty

where, Y = refers to purchase intentions

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4. Results and Analysis

Table 2 depicts the values of the R along with the values of R square,
standard error of the Estimate and Durbin-Watson. The coefficient of de-
termination is the “R Square” which has a value of 0.76. The predictors
brand loyalty, after sale service, product, product quality and price are
explaining the 76 % variation in purchase intentions. The value of 1.799
of Durbin-Watson shows that the possibility of autocorrelation is mini-
mal.

Table 2. Model summary.

Change Statistics
Std.
R Adjusted Error Durbin
Model R R Sig.
Square R Square of the F Watson
Square df1 df2 F
Estimate Change
Change Change

1 0.872a 0.761 0.756 0.20375 0.761 155.377 5 244 0.000 1.799

To examine the combined effect of Predictors on the dependent varia-

ble, the analysis of variance test is used [21]. Table 3 is the ANOVA
model which comprises of the variance analysis between after sale ser-
vice, price, product, brand loyalty, product quality and purchase inten-
tions. As the significance value is 0.00, it means that the model is a good
fit overall.

Table 3. ANOVA Table.

Model Sum of Squares df Mean Square F Sig.

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Regression 32.253 5 6.451 155.377 0.000b

1 Residual 10.130 244 0.042

Total 42.382 249

The coefficients are displayed in Table 4. This table is showing the

significant and insignificant values of the independent variables. The in-
dependent variables price, product and product quality have significance
value less than 0.05 explaining that these hypotheses are accepted. While
the independent variables after sale service and brand loyalty values are
greater than 0.05, demonstrating that these hypotheses are rejected.

Table 4. Coefficients.

Unstandardized Standardized
Coefficients Coefficients
Model t Sig.
B Std. Error Beta

(Constant) 1.688 0.388 4.353 0.000

Price 0.717 0.065 0.484 11.026 0.000

After sale service 0.016 0.055 0.009 0.285 0.776

1
Product 0.238 0.031 0.323 7.783 0.000

Brand product quality −0.388 0.079 −0.195 −4.878 0.000

Brand loyalty −0.053 0.028 −0.080 −1.935 0.054

Table 5 summarizes the results of the study. The H1 is accepted

meaning that price has a positive significant impact on purchase inten-
tions. In majority of the studies, the variable price has a positive signifi-
cant relation with the purchase intentions. The H2 after sale service has

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been rejected because its p-value is greater than 0.05. Similarly, the H5
(brand loyalty) is also rejected because its p-value is 0.54 which is greater
than 0.05. This indicated that after sale services and brand loyalty doesn’t
influence the consumer’s purchase intentions. Moreover, the H3 and H4
are important factors which influence the purchase intentions. Consumers
are concerned about the product itself and the brand product quality in
making purchase decisions.

Table 5. Summary of the results.

Hypothesis p-value Decision

H1: Price (P) and purchase intention (PI) 0.000 Accepted

H2: After sale services (AS) and purchase intention (PI) 0.776 Rejected

H3: Product (PD) and purchase intention (PI) 0.000 Accepted

H4: Brand product quality (BP) and purchase intention (PI) 0.000 Accepted

H5: Brand loyalty (BL) and purchase intention (PI) 0.054 Rejected

5. Conclusions

The major purpose of this study is to investigate the consumer’s purchase

intentions towards automobiles in Pakistan. It is crucial to have an under-
standing of the purchase intentions and decisions of the consumers be-
cause it is an intermediary to actual consumption. The results of the study
have revealed interesting findings. The three independent varia-
bles—price, product and brand product quality—have a positive signifi-
cant relationship with the consumer’s purchase intentions towards auto-
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mobiles. While the other two independent variables—after sale service

and brand loyalty—revealed an insignificant relationship with consum-
er’s purchase intentions.

The results of the study indicated that the consumers believed that the
prices of the locally manufactured cars are high. Therefore, instead of
buying high priced locally manufactured cars, they prefer to purchase
imported cars. Hence, price is an important factor in assessing the pur-
chase intentions of the buyers. Another research finding indicated that
there is a statistical significant relationship among the product and pur-
chase intentions and the result showed that the locally manufactured cars
lack the technological advancements and creativity. So as a product, im-
ported cars are preferred by the consumers as compare to local cars. The
last significant variable was the brand product quality. One of the most
important feature on which almost all the respondents agreed was on
brand product quality. They agreed that imported cars are of good, relia-
ble and of consistent quality as compare to locally manufactured cars.
The other two independent variables after sale service and brand loyalty
showed insignificant results. These finding depicted that consumers pre-
ferred element of brand product quality and price while making a pur-
chase of automobiles rather than being brand loyal. Due to the intense
competition, many automobile companies introduce new models of cars
almost every year or maximum after one year. Moreover, the companies
also have the knowledge that the preference of the consumers does
change with the passage of the time.

In the automobile sector of Pakistan, various practitioners may find this

research helpful in determining the preferences of the consumers. When
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making the strategies related to marketing, the most crucial task is to look
for the factors that influence the needs of the consumers [22]. The man-
agers in the automobile industry can upgrade their marketing strategies
for upcoming products, and even for the existing products. This study can
also help the policy makers while developing the Auto Policy.

Future Research

The study has identified the factors that influence purchase intentions of
the consumers towards automobiles in Pakistan. The research in this
study was narrowed to only five most significant variables (price, after
sale service, product, brand product quality and brand loyalty) from the
previous studies. Future research can be conducted on variables like eco-
nomics, social influences and status, culture and relationship with the car
dealers and a new framework can be constructed. Moreover, the re-
searchers can conduct the study on moderating role of personality and
culture in the proposed framework. Another future research can be con-
ducted by adding the mediating variable subjective norm from Ajzen’s
Theory of Planned Behavior in the proposed research framework.

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Questionnaire

Strongly Strongly
Purchase Intentions Disagree Neutral Agree
Disagree Agree

In purchasing cars, I will purchase

a locally assembled one
In purchasing cars, I will not purchase
a locally assembled one

I will only purchase imported cars when

locally assembled cars are not available.
I will recommend purchasing
locally assembled cars to my friends.

I will purchase locally assembled cars

even at higher prices.
I would consider purchasing
a locally assembled car.

There is a good probability that

I would consider
purchasing locally assembled car.

Strongly Strongly
Price Disagree Neutral Agree
Disagree Agree
The price of locally
assembled cars is high
The price of locally
assembled cars is low

Locally assembled cars are expensive

Locally assembled cars are inexpensive

Overall, I think a locally assembled car

will be good value for the money
If I buy a locally assembled car,
I will be getting my money’s worth.

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If I buy a locally assembled car, I will be

getting a good car for a reasonable price.
Continued
Strongly Strongly
After Sales Services Disagree Neutral Agree
Disagree Agree
Spare parts of locally assembled
cars are easily available
Spare parts of locally
assembled cars are low priced

Technical support for locally

assembled cars is easily available
Technical support for locally
assembled cars is low priced

Warranty on new locally assembled

cars is an important feature for me

In general, repair and

maintenance services provided
for locally assembled cars are adequate

Strongly Strongly
Product Disagree Neutral Agree
Disagree Agree
Locally assembled cars are suitable
for the local Pakistani market

Locally assembled cars have made

improvements to their suitability for
Pakistani driving conditions

Locally assembled cars are competitive

Locally assembled cars

have acceptable workmanship
Locally assembled cars
are of acceptable quality

Locally assembled cars are

technologically advanced

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There is creativity in locally

assembled cars
Continued
Locally assembled cars are
imitations of foreign cars
There is variety in
locally assembled cars

Locally assembled cars

have good appearance
Locally assembled cars come in
different colors and designs

Locally assembled cars are reliable

Strongly Strongly
Brand product quality Disagree Neutral Agree
Disagree Agree

Imported cars are of good quality

Imported cars are of consistent quality

Imported cars are very durable

Imported cars are very reliable

Imported cars have excellent features

Strongly Strongly
Brand Loyalty Disagree Neutral Agree
Disagree Agree
I feel loyal to imported
brand car company

Imported cars are my first choice

I would love to recommend

imported car brands to my friends

I am willing to buy imported car brand

even if price is a little higher than other
similar locally manufactured car

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