| Since the reform and opening, people's living standard has improved largely and disposable income has also increased, therefore, Chinese automobile market has experienced earth-shaking changes. The vehicles gradually become to be families'assets from the transport of enterprises. In order to research the nature of Chinese car market and potential of the law, this study will disaggregate total automobile sales to find the factors and their effect to mid/low automobile market by constructing appropriate measurement model for quantitative analysis.This study chose the automobiles'price below 200,000 RMB as the object, and this kind of car has certain representation for China's auto market, mainly in the following three aspects. First, all monthly sales and price data of mid/low models can be collected and are very detailed, which can easy to construct price indexes and reflect the effect of price factors; Second, the mid/low auto is the main drive of China market and the analysis of it will reflect the demand rule of the whole market; Last, this kind of model has been accepted by most of the Chinese residents in price and performance, and became the preferred auto by Chinese families. So, mid/low will revealed the wealth effect on auto demand pull effect to some extent.This paper focuses on mid/low models to analyze the entire market, as well as its'inherent laws and the sedan market characteristics more carefully. According to these autos'price, the market has divided into three grades: price under 70,000 RMB, 70,000 RMB to 140,000 RMB and 140,000 RMB to200. Many factors can impact car market, such as buying power, car prices, oil prices, automobile credit, and investment in fixed assets. However, because we can not get all the data which we want, I chose the buying power and car prices to analyst, there are many indexes to measure the level of purchasing power. The total retail sales of consumer goods, disposable income and purchasing power index are the most common. To match the buying power of the car market, disposable income is the most appropriate measurement. And the price level have no direct referencing data, Therefore, the price level should be constructed as to reflect the car's price index data. In this paper, by dealing with these monthly price data from January 2001 to December 2006 as the following method, then can get the market price index data and the composite price indexes of different grades.When we study demand factors of several grades auto market, it will come into a set of regression equations. While we estimating those equations whose disturbances are correlated SURE should be used since OLS estimators will not be efficient. By using more efficient SUR model, we can get more accurate estimation and construct regression model as follow In this model, Dt i is the demand per capital for car sizei ; Yt D is the disposable income of t period (urban); Pt i is the price index for car sizei ; G t is the gasoline price.We can find different grades with the different rules through regression analysis and the SUR model made not only the trend in time series emerged, but also the same effect factors of different grades comparable.First, for the low end model, the scenes of fierce competition is not easy to see, fluctuations in demand and prices are relatively stable, and the impact of prices and incomes is significantly lower than the other two models, which have close relation to the constantly improving living standards and increasing purchasing power of Chinese residents. Continuous increase in disposable income led to the change in the consumption. The low end cars have not been able to meet the demand of part people, because higher purchasing power enables them to a higher level model. From the perspective of manufacturers, a large number of manufacturers swarmed into made the low end cars market once highly competitive. Many manufacturers expanded their market share while the price war led to a price dropping lower and lower, but this phenomenon has almost inexistent today. Experienced a vicious price war, the low end car market has begun to move toward a new development cycle. At the same time, the situation also made consumers view this model more sensible. The low end car has really started change into economic model and went into millions of Chinese families.Second, Middle and low model is in a fierce market competition stage. Through the competition in the market, many manufacturers turned to middle and low auto market. Therefore, this market followed the low end car has also entered the highly competitive stage. In order to grab market share and expand sales, the manufacturers have joined in the price war, resulting in the sustained price dropping while significantly increased in demand. From the outcome of the model, both the price and the income are more efficient than the other two models, as evidenced by the price adjustments and increase income led to the demand growth of middle and low models.Third, winning more and more people's attention, China's middle end car market still has much room to excavate. In recent years, people's living standards have continued to increase, but compared with western developed countries, China's disposable income level remain low. So there is still a certain gap between the demand for this model and the other two. From the processed data can be seen, the decrease in the price of middle end models although less than the other two, the downward trend is obvious, this shows that the model is welcoming the market competition stage. From the model of the regression analysis, the price and demand effect has already exceeded which in low end model, especially the price effect which has been very close to the middle and low market. Therefore, we can predict middle end car market will be the major competition market among the whole of China. |
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