The Analysis Of Influence Factors Of Demand For China’s Automobile Market

Abstract:With the leap-forward development of automobile industry, our country has gone into the era of automobile consumption. Car demand which is a matter of automobile enterprise’s survival and development, and also is the development of the national economy, has become the focus of attention from all walks of life. It is both an instrument which measures a firms’profit effectively, and a comprehensive evaluation standard of car brand influence and competitiveness of firms.After reading a large number of foreign and domestic literature researches of the demand for cars, this paper defines some relevant concepts, quotes market demand theory and marketing theory, analyses the present situation characteristics of the Chinese car market and the demand for China’s auto market. Reflects the problems and contradictions in the development of the Chinese car market, and has a theoretical definition and identification of the influence factors of demand for cars. Taking data from1990to2011for example, using the principal component analysis (PCA) analyses per capita GDP, per capita disposable income, the average price, oil price, the urban population share and road transportation line length, per capita consumption expenditure, the residents’consumption level, population and age structure, extracting three principal component factors from these10factors by SPSS. Using co-integration error correction model has an empirical research on three principal component factor influence mechanism to car demand. The policy and the financial crisis as virtual variables are introduced in the short-term dynamic model to analyze the short-term dynamic adjustment effect on the demand for car. Exponential smoothing method is used to forecast the demand in our country, and gives the countermeasures and suggestions on the results of analysis finally.Empirical analysis results show that in the long-term there was a positive correlation between the demand for cars in China and the level of economic development. The level of economic development factor has higher load on per capita income, the urban population share, road transportation line length, and the residents’ consumption level variables. Price factor has negative effects on the demand for cars, but the effect is not significant. The variables of the average price and oil price are explained. The load of population factor which has a significant positive effect on the demand of the automobile consumption, on the growth and population age structure is bigger. In the short term, the per capita income, urbanization, population and the population age structure are still the important factors influencing the demand for cars. Virtual variable of the policy has obvious effects on demand for cars, but the financial crisis not. The results of auto demand forecasting shows that China’s automobile market consumption has a huge potential in future and has a strong growth trend. Therefore, it is necessary to make joint efforts of government and enterprise to release the huge potential promoting the development of auto industry stable and healthy in long-term.