CHAPTER 5: CONCLUSION AND RECOMMENTATION
5.1 Conclusion As mentioned earlier in the previous chapter, the purpose of this research is to investigate the relationship between demand for proton car as dependent variable and inflation rate, Gross Domestic Product per capita and fuel price as independent variables. The related information and data have been collected from Department of Statistics Malaysia, World Bank and MAA car sales statistics. The collected data has been covered in this research with yearly data which is starting from 1980 to 2012. Firstly, the objective of this research is to identify the factors that influencing the demand for Proton cars. This research covered only three of the variables which are inflation rate, Gross
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Based on the result of multiple regression analysis, there is a positive relationship between inflation rate and demand for Proton car. Although the inflation can increase the general prices of goods and services by the meant of lowering the purchasing power among the consumers, the consumers still purchasing their car during the inflation occurred. This is because, the cars are considered as necessary good for the consumers that should be used in their daily life. Besides, the result also shows that there is a positive relationship between Gross Domestic Product per capita and demand for Proton car. In addition its coefficient value indicates the largest beta rather than other two variables. Furthermore, the granger causality test shows that GDP per capita is a significant relationship with Proton demand. In other word, GDP per capita is a major factor that influences the demand for Proton car if compared to other …show more content…
First and foremost, the government should look into an incentive policy especially offer the rebate for Electric Vehicles (EVs) Proton Saga in order to encourage Malaysian to move toward it. The benefit of establishing this policy is not only can enhance the performance of automobile industry but also preserving the environmental health with the aim of achieves the sustainable of economic growth and environment. Due to the implementation cost for EVs is high; the Malaysian government should work hand in hand with foreign government from United State, China and United Kingdom. Meanwhile, the economic integration can be accomplished through exchanging of ideas, knowledge and technologies among them. As a result, the better quality of proton Saga can be promoted and compete in domestic market. By doing so, the Malaysian will be attracted by the quality product and tend to increasing their preferences for EVs Proton Saga. The high willingness to pay existed as the consumers get impression that is worth for them to pay such quality Proton
The world of technology is ever changing and advancing. With the automotive industry in play technology is constantly surpassing what is available today with what can be done for tomorrow. Technology and the automotive industry go hand in hand with constant improvement to components of cars. Due to technology advancement there is competition within the car industry, especially between American car companies and European car companies. European car companies provide their buyers with innovative variety and revolutionary luxuries. European car technology is superior to American car technology due to their safety, entertainment, and luxury features.
7 the data we obtained from BMW with research in the library and on-line. We then developed a
Subramanian, D. (2010). Indian car market lures big guns. Marketing Magazine , 105 (1), 6.
It is no doubt that automobiles have become a way of life in the current society besides the transport sector contributing immensely to the economic growth of every cou...
The inflation rate of Thailand was the lowest during 1998. From 1997 to 1998, to solve the Asian financi...
As a result of the increased demand of cars, the competition among car companies is becoming intense. Although the market of car is the biggest growing market in the world, there are still some companies who make cars failing year after year. However, there are some outstanding car companies such as The BMW Group performing distinctly.
BMW having high market share in European and U.S luxury car markets, started facing issues with launch product qualities and also facing a fierce competition from Japanese producers. Currently the market share was still stable but the rigorous growth of Japanese producers would affect BMW in future. These Japanese competitors had set higher standards of conformance.
... Also important is the price of complements, or goods that are used together. When the price of gasoline rises, the demand for cars falls.
However, their susceptibility or elasticity greatly depends on time frame. In the short-run, buyers tend to be more price elastic because they can opt to delay purchasing a vehicle. As a result, in the long-run these consumers are less elastic. Furthermore, buyers enjoy a plethora of choices, or substitutes, and therefore can easily switch firms. Therefore, buyers have substantial leverage over automotive manufacturers and exert a downward pressure on prices, as well as demanding better service and quality. However, it is important to note that automobiles are both a need and a want, depending on the situation of individual buyers. For instance, for a rural Canadian, public transportation may be difficult to acquire and therefore might constitute personal vehicles as a need; conversely, for someone residing in a metropolis like Toronto, a vehicle may be deemed
A vehicle is one of the biggest purchases a person will ever make. Over the years, the prices of an automobile have increased due to the rise of inflation. Due to a price index, the price of an automobile changes over a certain period of time. Economists compare averages of automobiles to calculate the cost of each vehicle that presents itself on a car lot. When all of the above is calculated within the purchase of an automobile, it affects every area of making the automobile to selling the automobile. All of these factors are impacted together for the automobile industry as a whole.
Types of goods will help us determine whether demand for cars is elastic or inelastic. If a good is considered to be a luxury rather than a necessity, the greater is the price elasticity of demand (McConnell & Brue, 2004). Cars can be deemed as necessary due to a need for transportation. Other types of cars can be classified as luxury. A person who needs to be able to get from one place to another will have the need for a car. An old vehicle may suffice. In such a scenario, buying a brand new car is more likely to be a luxury rather than a necessity. If car prices go up, people are more inclined to just keep driving their old vehicles. In essence, the cars already on the road would serve as substitutes for new cars. However, over a longer period of time, old cars tend to wear out and the elasticity of demand for vehicles is less.
As Tata Motors is an automobile company, the raw materials required in production of a car or a vehicle include aluminium, copper, platinum, palladium, rhodium, steel and zinc. The prices for these materials have been increasing in the recent years. An increase in price of input materials could severely impact its profitability. Additionally, increases in fuel costs also pose a significant challenge to automobile manufacturers worldwide, especially in the commercial and premium vehicle segments where increased fuel prices have an impact on
Finally, professor Prest considering the effect of price inflation, he concluded indicators of excess public revenue over expenditureare both relatively to the GNPhe told that if the income of the people will raise they will also facing the price inflation because higher the income pays higher incometax, no matter whether the increase in income is real or not. On the other side of expenditure, if cost of the state is raising, people wanted to make heavy demand on the social services so the relative price effect are depending upon the inflation rate . For instance if the rise in money wages and the share of total wages cost rise then its pushes up the inflation in the public sector.
The global company Mercedes-Benz is considered one of the most successful and well-known automotive companies worldwide. Since 1886, the company’s founders Gottlieb Daimler and Carl Benz made history with the invention of the automobile, including the Daimler Group, which is one the biggest producers of premium cars and the world’s biggest manufacturer of commercial vehicles globally (Daimler, 2013). Their main focus is innovation, safety, technology, style, brand image, expansion, and superior automobiles by offering the best of the best to consumers worldwide. The brand’s philosophy is to continuously create radically new products to advance the cause of human mobility. It is also the number one luxury brand in the United States and Germany while continuously expanding in China and Russia as well (Interbrand, 2013). Mercedes-Benz has a great selection on divisions such as cars, trucks, vans, buses, and financial services offered to any consumer or business. Their global reach has increased tremendously by including production facilities in 17 countries on five continents and having 93 locations worldwide. As a pioneer of automotive engineering, their strategy is to continue the same pioneer role with the ongoing development of mobility, especially in the areas of safety and sustainability (Daimler, 2013). It is very essential for the company to focus on consumers’ needs and their highly well known brand in a competitive global economy. That is why the company Mercedes-Benz releases a brand new model every year to stay on top of its competitors by improving previous models. Some strategies practiced are global marketing, global product development, global product pricing, global advertising, global distribution, an...
The increase in prices is known as inflation. This macroeconomic objective aims at keeping prices as low as possible. Economists normally would like to understand the changes of what is happening in the purchasing power of consumers. The price stability can be measured by looking into the (CPI) which is the index of the prices of representative basket of consumer goods and services. According to StatsSA, (2016) the inflation rate averaged 9.27 percent from 1968 to 2016. Consequently, the report states that the consumer prices index in South Africa increased by 6 percent year-on-year in July of 2016.The economists however, argue that the inflation figure obtained was one of the lowest ever experienced by south Africa due to the fact the cost of electricity and fuel remained constant. This shows that South Africa at the moment is currently doing well; however only because inflation is very dynamic and changes so it can not be guaranteed that it will remain the same