Essays on Forecasting Demand and Preferences for Cars in Emerging Markets: The Case for China.

Qian, Lixian (2012) Essays on Forecasting Demand and Preferences for Cars in Emerging Markets: The Case for China. PhD thesis, Lancaster University.

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Abstract

The emerging markets (EMs) have been increasingly important in the global economy, especially during the recession. These markets have different characteristics from the developed markets such as high level of market heterogeneity (Burgess & Steenkamp, 2006; Sheth, 2011). This thesis explores how to forecast the demand for cars in a market context that has been experiencing significant and fast growth. Car sales in 2002 were only 1.25 million units in China, while the figure increased to 11.27 million by 2010. Research on car market demand in developed economies is well established, but little attention has been paid to the emerging car markets and the challenges that researchers face when they have to predict the demand or preferences for cars in the EMs. By using the Chinese car market as the market context, this thesis explores how to tackle specific problems associated with forecasting the demand for cars in an emerging market. The thesis contributes to the literature in the following ways. We apply some of the well-known techniques that have been applied in other domains and assess how they fare in predicting the demand and preferences for cars in a new market context. We also take into account that preferences and the way in which consumers make choices in some markets may require a different methodological approach. We demonstrate the importance of understanding local consumer behaviour when it comes to not only collecting the data but we also show that this may mean that we have to modify or reject some of the approaches that have been used in more mature markets. The thesis also proposes novel modelling approaches that are inspired by the specific problems of predicting car demand in China, but these proposed methods can also be replicated and tested for other products in other new emerging market economies.