Assessing and Forecasting the Long-Term Impact of the Global Financial Crisis on New Car Sales in South Africa

Tendai Makoni () and Delson Chikobvu
Additional contact information
Tendai Makoni: Department of Mathematical Statistics and Actuarial Science, University of the Free State, Bloemfontein 9031, South Africa
Delson Chikobvu: Department of Mathematical Statistics and Actuarial Science, University of the Free State, Bloemfontein 9031, South Africa

Data, 2023, vol. 8, issue 5, 1-16

Abstract: In both developed and developing nations, with South Africa (SA) being one of the latter, the motor vehicle industry is one of the most important sectors. The SA automobile industry was not unaffected by the 2007/2008 global financial crisis (GFC). This study aims to assess the impact of the GFC on new car sales in SA through statistical modeling, an impact that has not previously been investigated or quantified. The data obtained indicate that the optimal model for assessing the aforementioned impact is the SARIMA (0,1,1)(0,0,2) 12 model. This model’s suitability was confirmed using Akaike information criterion (AIC) and Bayesian information criterion (BIC), as well as the root mean square error (RMSE) and the mean absolute percentage error (MAPE). An upward trend is projected for new car sales in SA, which has positive implications for SA and its economy. The projections indicate that the new car sales rate has increased and has somewhat recovered, but it has not yet reached the levels expected had the GFC not occurred. This shows that SA’s new car industry has been negatively and severely impacted by the GFC and that the effects of the latter still linger today. The findings of this study will assist new car manufacturing companies in SA to better understand their industry, to prepare for future negative shocks, to formulate potential policies for stocking inventories, and to optimize marketing and production levels. Indeed, the information presented in this study provides talking points that should be considered in future government relief packages.

Keywords: SA new car sales; Box–Jenkins methodology; global financial crisis (GFC); forecasting; SARIMA (search for similar items in EconPapers)
JEL-codes: C8 C80 C81 C82 C83 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2306-5729/8/5/78/pdf (application/pdf)
https://www.mdpi.com/2306-5729/8/5/78/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jdataj:v:8:y:2023:i:5:p:78-:d:1134193

Access Statistics for this article

Data is currently edited by Ms. Cecilia Yang

More articles in Data from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().