This document analyzes the performance of the automobile industry over the last 10 years and the factors that contributed towards the sales of automobiles at Autonation. The national sales data for Autonation over the last 10 years indicates that there has been an overall decrease in car sales. This is mainly due to the global recession that hit the US starting 2008 leading to a higher rate of unemployment and thus lowering consumer purchase index.
The historical trend indicates an increase in sales particularly during the summer period (June to August) due to various factors such as newer car models being introduced during this time of year, parents buying their children cars for their graduation and gas prices being relatively lower in the summer months. Judging from seasonal factors, we find that car sales rose between 2% to 11% in summer months between Mar and August.
The above different forecasts were calculated by using different variables which influenced car sales. We’ve predicted future by using time as the only influence of sales based on historical trends. Later we had forecasted using months to accurately predict sales over the next 2 years. Lastly we’ve used moving-average to predict sales over the same period. Judging from the data, we propose Regression with Months as Dummy Variables model to accurately forecast sales over 2012-2013. Since we know from the historical trend that sales have peaked during summer in July-August, our model also accurately measures the peaks. Forecast for July and August are highly statistically significant, and 95% confidence interval also does not include zero (0), we can safely assume that the peaks have measured correctly. Although our model includes data where only 41% of the factors are measured as the influencers, we don’t have the remaining 59% factors. Nonetheless, we are bound by the national sales data, thence this is our most favored model.
Since GDP is...