It is an interesting fact to learn how the market fluctuates due to various factors. There are multiple factors which will define the growth rate as well as the decline of the brand in the market. We analyze multiple factors which affect the sale rate in the market. The customers or the clients influence whether the brand can succeed in the market or cease to decline in the market.
Why sub-segment categorization and Qualitative Analysis is required for automotive forecasting
- In 2010, European commercial vehicle Manufacturer decided to enter into Indian Truck Market. They started to play with data of the Truck segment and sub-segment. They found that 31T GVW segment is a fastest growing segment and they decided to launch their own product of that segment the 31T and the 8X4 tipper which Can be utilized for mining application, but they failed drastically, and it was hard for the brand to reach a sale count of ten units. The Company did not analyze the segment and its sub-segment trends in the market and the forecast prepared for that sector. They did not give importance to the point that the market was growing of 8X2 Rigid haulage segment and not the Tipper segment.
- The other main reason for the failure of the product was not analyzing the forecast regarding the uses of products. Launching 8X4 Tipper also failed to impress the customers. The companies should also check actual uses of the product along with other factors like overloading and product performance. This European product was not fit for mining application; it was fit only for an on-road application like Construction. The whole forecast was not done in a proper manner. This improper forecasting which leads to the failure of a brand.
- In this case, we analyze the reason for downfall when the company or company’s agency only qualitative research. One German Company was planning to launch its premium car model in India. They made a projection that this is not a car, but it is a lifestyle, it’s a brand symbol and they made advertisement by branding the vehicle to lead the life. By devising some assumptions, the company structured a good forecast for an improved volume of sale rate of this model. The company considered the factors like specific car image, competitor’s product position in the market, differentiation, the mindset of the Customer to buy heavy powered vehicles. They did not think about segment volume, segment size, and the company also failed to do a growth analysis for the product in comparison to its competitors. The failure in analyzing the above-mentioned factors resulted in the drastically failure by the company to achieve its target volume. The forecast does not give effective result if all attributes do not consider the factors affecting the sale.
ACG assisted almost all major OEMs, Suppliers, and key stale holders for forecasting the volume and trend of the market. Our precise forecast helped them to take the right decision at the right time. The demand forecast is an important factor in making a strategic decision.
ACG use more than 30 parameters in forecasting which will give the more precise result of future trends and market parameters for better sale rate. The following are a few factors which can affect the market trend:
- Defining the market trends
- Brand Development index
- Divide total industry demand into its main components.
- Forecasting the drivers of demand in each segment
- Project the factors of how each driver demands are likely to change.
- Conduct sensitivity analysis regarding the product to understand the most critical assumptions and to gauge risks to the baseline forecast.
- Direct interaction with potential buyers, check customer pulse and sentiments
- New product launch response among the customers
- Do a study of the macroeconomy and economy performance of the market
- Policies and norms affecting the sale rate
- Population mix and their needs
- Living standard and how it affects consumer mentality
- Infrastructure for vehicle maintenance
- Policy changes
- Technology improvement
- Offers by brand
- Competitor strategy
- Product improvisation
- Brand value
- Environmental factors
- Geographical factors and many other factors.
The forecast methodology is a complex process and the changes are often based on the market dynamics. We develop and prepare forecast at Industry, Segment, Sub-segment, OEMs, Model, and variant level.
In Geographical terms, we cover more than 50 markets across the world. The forecast available at Global, Country, State, and City level. Besides the volume forecast, we also do the qualitative analysis in which we analyze customer’s purchase behavior and the reasons for the shift in their behavior factors which could influence the buying behavior, brand acceptance, brand perception, Product quality, Product testing, brand value, and many other factors.
In some circumstances, we prepare two different cases of the forecast. One could be prosperity and the other one will be based on the recession or based on two different GDP projections.
ACG developed its own matrix for the automotive Industry forecast. Year on year, our forecast is getting closer to actual market condition. We have a forecasting department who work around the year on this subject which helps us accurate and current forecast details of the market structure.
Even when the work is sound, though, uncertainties will remain as vacuum point. The best way in forecasting is to keep a watch on each development of markets and update the forecast based on the developments. The firms have a thought process and framework will have a better chance of finding these discontinuities and develop a chance for improved sale rate than those who do not will find it difficult to keep a hold in the market. And those who have their business strategies on a solid knowledge of demand will stand a much greater chance of making a wise investment, planning, and competing effectively.
Since we do forecasting on not only volume but also in terms of the worth of the product. We can calculate the future revenue of the firms based on the factors defining the sale. Our exclusive forecast service gives access to gauge the impact on demand forecast like increasing the promotion budget, increasing the distribution coverage, price changes, an extension of product line and so on. As per our previous forecast projects, at some point, the promotion strategy and other described filter will have a peak impact on the market value of the product and after that threshold limit market value does not increase sales after some specific point.
Doing specific forecast is also part of our services like doing forecasting for a vehicle with Air suspension or bogie suspension or vehicle fitted with automated climate control device etc.
We include car, passenger vehicle, commercial vehicle, truck, Bus, two-wheeler, three-wheeler, and other automotive components and products in our catalog of services. Forecasting will always remain the prime factor in brand success. The more accurate it is more benefits the brand will gain.
We provide a Quarterly Sales and Production forecast. Please contact us to get Global critical Model and City forecast.