PASSENGER CAR SALES FORECASTING: ASSESSING A FRAMEWORK USING COUNTRIES’ SPECIFIC FACTORS

The automotive industry growth in emerging and developed markets has important implications for economics planning and policies. Especially, projecting passenger car sale is essential for the effective operation and sustainable development of firms in automotive industry and the industry-related firms. This paper contributes to this aim by presenting, assessing and updating a framework which explicitly model the passenger car sale as a function of specific countries' factors: urbanization, population density, scrappage rate, the income level in term of GDP and the level of current vehicle stock. The framework is assessed on the basic of panel data including the time series data (2005-2017) and cross-section data for 38 countries which cover 80% of passenger car in use worldwide. The results suggest that the original framework can be a useful tool for forecasting the expected passenger car sales trend worldwide in the long term. However, the performance of the original framework in the short term at country level are materially different as the income elasticity of passenger car sales are widely varied. Therefore, this paper also adjusts the parameters in the original framework to mitigate the effects of different in income level on the performance of car sales forecasting at country level.