149388_Lazaro_Labrakis_Task_A_4075617_1213448513.docx

Furthermore mid range passenger vehicles such as

Info icon This preview shows pages 5–7. Sign up to view the full content.

View Full Document Right Arrow Icon
in alternative products, and in this case sports utility type vehicles. Furthermore, mid-range passenger vehicles such as Sedans have experienced a decrease in sales which suggests a loss of interest in this product within the market. Smaller type vehicle sales have been more consistent over the last 10 years and currently make up a 45% share of the Passenger Vehicle sales market 4 . The seasonal component of the passenger vehicle time series arises due to changes within the economy and the new car industry. The peak sales observed each year in June are due to a number of circumstances that have created the market we see today. For starters, June marks the end of the financial year, which means in simple terms that a new vehicle purchase will not expense and it will be a tax write off. With this essentially setting the foundation for increase sales, the industry has responded with some competitive strategies including sales and discounting over the last few years 2 . For our rational consumer this is the best time to buy. These two forces combined create the peak sales we see each June, and influence the seasonal component within the time series. The cyclic patterns observed within each year period may have been caused by monthly sales, special deals or any other functions of the economy at the time. Things such as holidays like Christmas and Easter will see a decrease in sales as consumers spend more on holidaying. Furthermore interest rate changes will also cause cyclic patterns as this will affect how much consumers spend. The random dip observed at mid-2008 was due to the global financial crisis (GFC) having widespread effects into the economy of Australia and thus effects can be seen in all 3 plots. The GFC caused instability within the economy and consumers responded with an increasing propensity to save their incomes which is why we observed a major decline in sales. 2 Federal Chamber of Automotive Industries ANNUAL REPORT 2015 (pp. 1-26, Annual Report). (n.d.).
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The SUV time plot in my opinion was the most interesting, presenting the strongest increasing trend. Primarily, the overall increasing trend was in respect to the growing market from population growth and the dynamic nature of consumer preferences for vehicles over the last 10 years. Sports utility type vehicles are typically larger relative to passenger type and also boast features such as off road and luxury components that are not present in passenger vehicles. One source argues that a goldilocks effect is occurring, using the analogy of “SUVs are the Swiss Army Knife of cars” 3 . The benefit being the advantages that come with a larger vehicle; larger cabins, higher ride height and additional features 4 . Again, the seasonal components observed were due to peak sales occurring at the end of the financial year sales in June. Consumers that are in the market to buy a new car would tend to research as it quantifies a large purchase. Investing a large amount of money into transport is likely a rationalised task and many consumers would use information available to them in order to maximise the value of their purchase.
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern