Passenger car sales projections: Measuring the accuracy of a sales forecasting model

Abstract

This paper considers the importance of the automobile industry in the global economic environment and sheds additional insight on the forecasting of passenger car sales. The study uses data from the automotive sectors in 38 countries, which account for more than 80% of passenger cars in use worldwide for testing the accuracy of a general framework that uses income and other countryspecific factors to forecast passenger cars sales for short- and mid-term periods. The results indicate that this framework can be applied to a wide range markets, but its performance is primarily influenced by income levels in these markets. Tested and discussed are not only income as the main predictor of sales, but also the effects of other factors such as vehicle ownership level on passenger car sales projections. Income is shown to play both a determining role and a moderating role that affects other variables' impact on passenger car sales. © Ekonomicky ustav SAV a Prognosticky ustav CSPV SAV.