Associative Forecasting Model: Sales of Passenger Cars vs Unemployment Rate
Introduction
Malaysia is centrally located in the ASEAN region with a population of more than 500 billion people, Malaysia offers vast opportunities for global automotive and component manufacturers to set up manufacturing and distribution operations in the country.
The rapid growth of the economy and the high purchasing power of its population have made Malaysia the largest passenger car market in ASEAN. At the same time, the establishment of national car projects, PROTON and PERODUA, has transformed Malaysia from a mere motor car assembler into a car manufacturer. With a ratio of 200 cars for every one thousand people, Malaysia ranks among countries with high car ownership ratio in the region. Toyota, Honda, Nissan, Mercedes Benz, Volvo, BMW, Peugeot and Volkswagen are some of the global automotive companies which have set up operations in Malaysia to take advantage of the buoyant consumer demand.
The automobile market has rebounded impressively from the effects of the Asian financial crisis of the 1990s. Total vehicle sales reached an all-time high of 605,156 units in 2010, surpassing the previous highs of 548,115 units in 2008 and 536,905 units in 2009. Total vehicle sales in 2011 were 600,123 units.
This forecasting model is looking into the relationship between the sales of passenger car in Malaysia with the unemployment rate. The unemployment rate can be defined as the number of people actively looking for a job divided by the labor force. Changes in unemployment depend mostly on inflows made up of non-employed people starting to look for jobs, of employed people who lose their jobs and look for new ones and of people who stop looking for employment.
The findings of the data and analysis will be presented in table and graph. The two variables used in this forecasting model are Sales of Passenger Cars (dependent variable) and Unemployment Rate (independent variable) in Malaysia from year 2003-2013.
Time Series Data – 2003-2013
Year
Malaysia is centrally located in the ASEAN region with a population of more than 500 billion people, Malaysia offers vast opportunities for global automotive and component manufacturers to set up manufacturing and distribution operations in the country.
The rapid growth of the economy and the high purchasing power of its population have made Malaysia the largest passenger car market in ASEAN. At the same time, the establishment of national car projects, PROTON and PERODUA, has transformed Malaysia from a mere motor car assembler into a car manufacturer. With a ratio of 200 cars for every one thousand people, Malaysia ranks among countries with high car ownership ratio in the region. Toyota, Honda, Nissan, Mercedes Benz, Volvo, BMW, Peugeot and Volkswagen are some of the global automotive companies which have set up operations in Malaysia to take advantage of the buoyant consumer demand.
The automobile market has rebounded impressively from the effects of the Asian financial crisis of the 1990s. Total vehicle sales reached an all-time high of 605,156 units in 2010, surpassing the previous highs of 548,115 units in 2008 and 536,905 units in 2009. Total vehicle sales in 2011 were 600,123 units.
This forecasting model is looking into the relationship between the sales of passenger car in Malaysia with the unemployment rate. The unemployment rate can be defined as the number of people actively looking for a job divided by the labor force. Changes in unemployment depend mostly on inflows made up of non-employed people starting to look for jobs, of employed people who lose their jobs and look for new ones and of people who stop looking for employment.
The findings of the data and analysis will be presented in table and graph. The two variables used in this forecasting model are Sales of Passenger Cars (dependent variable) and Unemployment Rate (independent variable) in Malaysia from year 2003-2013.
Time Series Data – 2003-2013
Year
References: Business Opportunities : Malaysia’s Automotive Industry, 2012 http://www.mida.gov.my/env3/uploads/Publications_pdf/BO_MalaysiaAutomotive/Automotive2012.pdf [Accessed 8 April 2014]