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An Econometric Analysis of the Determinants of Passenger Vehicle Sales in Germany

Author

Listed:
  • Zeng, Yu

    (RWTH Aachen University)

  • Schmitz, Hendrik

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Madlener, Reinhard

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

The automobile market is one of the most significant sectors of the German economy both in terms of value added and number of employees. This paper focuses on the determinants of automobile demand in Germany from 2008 to 2016. We apply multiple linear regression in order to estimate new passenger vehicle sales, using monthly data on price, product parameters, quality ratings, macroeconomic variables as well as government incentives as explanatory variables. For each car segment, a separate model is built, with the purpose of uncovering similarities and differences between distinct segments. Our results indicate that quality is significant for all groups, while consumers’ attitudes towards vehicle prices vary from segment to segment. Purchasers of large-sized cars are sensitive to the fuel efficiency of vehicles, whereas drivers of small-sized vehicles pay less attention to fuel consumption. Most of the consumers in Germany are not considering vehicle emissions in their purchasing behavior. The results of this study can help automobile manufacturers to make strategic decisions and help policymakers to understand the automobile market better.

Suggested Citation

  • Zeng, Yu & Schmitz, Hendrik & Madlener, Reinhard, 2018. "An Econometric Analysis of the Determinants of Passenger Vehicle Sales in Germany," FCN Working Papers 6/2018, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    • Handle: RePEc:ris:fcnwpa:2018_006
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    Citations

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    Cited by:

    1. Specht, Jan Martin & Madlener, Reinhard, 2018. "Business Models for Energy Suppliers Aggregating Flexible Distributed Assets and Policy Issues Raised," FCN Working Papers 7/2018, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    2. Wolff, Stefanie & Madlener, Reinhard, 2019. "Charged up? Preferences for Electric Vehicle Charging and Implications for Charging Infrastructure Planning," FCN Working Papers 3/2019, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    3. Liu, Xueying & Madlener, Reinhard, 2021. "The sky is the limit: Assessing aircraft market diffusion with agent-based modeling," Journal of Air Transport Management, Elsevier, vol. 96(C).
    4. Liu, Xueying & Madlener, Reinhard, 2019. "Get Ready for Take-Off: A Two-Stage Model of Aircraft Market Diffusion," FCN Working Papers 15/2019, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).

    More about this item

    Keywords

    Automobile Demand; Multiple Linear Regression; Germany;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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