An application of GM (1,1) model for automobile industry

This study applied GM (1,1) model with 4∼6 terms data to predict the sales amount and market share of China automobile industry from year 2002 to 2006 based on the statistical information between 1995 and 2001. The results of GM (1,1) model forecasting include the total market, domestic cars (CKD), import cars (CBU), passenger vehicles, commercial vehicles and trucks. The results are as follows: 1) one of the most advantageous characteristics of forecasting method is that it requires fewer data and is proper for predicting China automobile industry, especially the results of GM (1,1) model. 2) The automobile industry in China is growing up rapidly according to the predictions of DRI/WEFA and "15-plan" of China. By means of GM (1,1) forecasting model, the total market in China was predicted to boost from 2,571,000 units/year to 4,013,000 units/year between year 2002 and 2006. The passenger vehicles grow from 750,000 units to 1,157,000 units per year; moreover, the commercial vehicles increase from 978,000 units to 2,297,000 units per year. The trucks arise from 874,000 units to 1,135,000 units per year. The domestic vehicles were predicted to increase from 2,310,000 units to 3,869,000 units per year during the same period. The market share drops from 99.6% to 96.4%.