Light Vehicles Demand Projectionssignment
The auto industry is currently undergoing a few significant changes around the world. Three of the most significant changes happening now and likely to evolve further are:
Development and popularity of ride-share services like Uber
Development and increasing adoption of electric vehicles (EVs)
Development of autonomous driving
On top of the above three industry-specific trends, other long-term socio-economic trends are happening in almost all parts of the world.
In addition to these long-term trends, supply-chain issues have also impacted the last two years. Please keep those in mind as you develop your thoughts and answers to this assignment.
It is 2023, and a major global car company has hired you to help them estimate the overall market size (in units) for light vehicles (cars, SUVs, and light trucks) in the US in 2035.
As you can imagine, the three significant changes mentioned above (and socio-economic trends) will significantly impact the overall market size of light vehicles.
Using no more than 500 words, please estimate the market size for light vehicles (in units) in 2035 in the US and explain the rationale behind your estimate based on the three factors above plus socio-economic trends.
Of course, you need to submit your estimate as “number of units” (or a reasonable range). But this exercise is more about reasoning and logic and how you will factor in all the key factors (especially the primary three factors listed above) that will influence the market size 12 years from now. So please give your reasoning clearly that shows your understanding of how various vital factors will affect the future market size for light vehicles.
If you make any assumptions (which you will most likely make), please state the same. Please cite any external sources of data/information you use to write this assignment paper.
Historical (1976-2021) sales data of light vehicles in the US is shown below. I downloaded this from Statista.com (https://www(dot)statista(dot)com/statistics/199983/us-vehicle-sales-since-1951/Links to an external site.)
I was also able to obtain 2022 numbers from a different section of Statista, and have added them to Excel
Vehicle Demand Projection
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Vehicle Demand Projection
As of 2023, the auto industry has experienced significant changes that are expected to impact the size of the light vehicles market in the US over the next 12 years. Of these, the increasing popularity of ride-sharing, increased development and uptake of electric vehicles (EVs), and the maturing technology of autonomous driving are three main developments that are likely to affect the overall market size of light vehicles. The estimation based on historical data predicts that 15,945,173 units will be sold in 2035. However, based on the three developments in the auto industry, as well as socio-economic trends, my estimate for the market size of light vehicles in 2035 is approximately 12,500,000 units.
With time, ride-sharing services have become a mainstay in the transportation sector owing to their convenience and affordability. As people opt for ride-sharing instead of owning their cars, such services have started having a negative influence on light vehicles’ market size. I expect that this trend will continue, especially among urban dwellers, and will decrease the demand for light vehicles. To this end, it is estimated that this trend alone will result in a decrease in the market size of light vehicles by approximately 500,000 units as of 2035.
Another factor that will influence the number of light vehicle units sold in the United States market will be the increasing adoption and development of electric vehicles. The demand for EVs is rising globally, and many countries including the United States have announced the likelihood of adopting policies that will lower the number of gasoline vehicles sold to consumers (Muratori et al., 2021). In addition, several automakers have announced their plans to shift their focus to EVs, and governments are offering incentives to encour...