Forecast Taiwan Auto Demand

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Text of Forecast Taiwan Auto Demand

  • B A F T

    Group 5

    Forecast Demand on Automobiles to increase sales for automo9ve company

    Anita, Louie Fanny, Paul

  • I. Business Problem

    Client: an automo3ve company like Suzuki Business benet:

    Increase automobile sales Improve marke3ng eciency

    Set up suitable marke3ng strategy among regions and seasons

    Challenges: Consumer preference for brands is not considered (hard to

    predict) Opportunity: Design a beDer marke3ng strategy to decrease cost and increase sales

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  • II. Forecas3ng Goal

    Goal: Forecast the demand on automobile in 2015. Analysis:

    Prospec3ve: predict future trend and analyze seasonal paDerns

    The forecasts will be used to set marke3ng strategies and promo3onal plans in 2015

    Forecast horizon: 1 year (12 months)

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  • 4

    1. Number of automobile Forecast trend for long-term strategy Source: Ministry of Transporta3on and Communica3ons R.O.C 2000:12- 2014:08 (165 obs.) Four largest ci3es: New Taipei, Taipei, Taichung, Kaohsiung Upward trend

    III. Data Descrip3on (1/2)

  • III. Data Descrip3on (2/2)

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    2. Number of new automobile registra3on Analyze seasonality for short-term strategy 2012:01~2014:11 (35 obs.) Four largest ci3es: New Taipei, Taipei, Taichung, Kaohsiung Seasonality: 6 months

    Low in February and August

    Peak in January and July!

  • IV. Methods

    1. Number of automobile 1) Double Exponen3al 2) Linear regression 3) Nave

    2. Number of new automobile registra3on 1) Linear regression 2) Holt-Winter 3) Seasonal Nave

    6 seasons

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  • Forecast

    Method: Double Exponen3al

    The number of automobile is predicted to increase!

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    V. Forecasts and Evalua3on (1/2) - Number of automobile

  • Holt-Winter does not capture highs and lows well!

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    Regression has the 2nd lowest RMSE and captures the seasonality well!

    Highest in January & July!

    Forecast

    V. Forecasts and Evalua3on (2/2) - Number of new automobile registra3on

  • VI. Others: Opportunity for motorcycle sales

    Data: number of motorcycle (2000:12- 2014:08) The amount of motorcycle dropped sharply in July 2013 The reduc3on is one-3me event due to a policy that

    encourage old motorcycle to re3re before October 2013 to waive taxes

    Opportunity for motorcycle sales!

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  • VII. Recommenda3ons

    1. Increase automobile produc3on 2. Marke3ng strategies for automobile: Same marke3ng strategies on all regions Heavy promo3on and adver3sement on January

    (near Chinese New Year) and July (students graduate)

    3. Opportunity for motorcycle sales to increase Promo3on on motorcycles

    (e.g. discount on purchasing automobile with motorcycle)

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