Predicting vehicle sales from GDP in 48 countries: 2005-2011

Abstract

This study examined the relationship between GDP and vehicle sales in 48 developed and developing countries during the years 2005 through 2011. The countries examined were Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Norway, Pakistan, the Philippines, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, Turkey, the United Kingdom, the United States, Uruguay, and Venezuela. The annual vehicle sales in the individual countries ranged from about 16 thousand to about 18.5 million. The annual GDP values for the individual countries ranged from about 23 billion to about 11.7 trillion constant 2000 US$. The main result is that the logarithm of GDP is a strong linear predictor of the logarithm of vehicle sales. This relationship held both for the seven years combined and for each individual year during these seven years—a period that included both general economic prosperity and economic downturn. Using the obtained regression equations, average vehicle sales per GDP value were calculated for the 48 countries for each of the eight time periods of interest. For the combined years 2005 through 2011, this turned out to be 1,869 vehicles per 1 billion constant 2000 US$.