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How Do I Conduct a Car Market Analysis?

Developments related to hybrid cars should be included in a car market analysis.
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  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 29 July 2014
  • Copyright Protected:
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A car market analysis is an industry report that presents copious information on the players in this market. An industry analysis report typically looks at the political, demographic, and economic aspects along with providing analysis of technology and culture as well. The report should allow an individual to gain a better understanding of the market in general or help a company gain more insight. Companies often create a car market analysis to ascertain changes in this volatile business industry. The report often covers an annual or longer period, such as three years.

The automobile industry often faces heavy regulations from government agencies. Regulations on labor laws, gas mileage standards, and safety measures are all political factors in a car market analysis. Future political regulations are those most important to players in this market. Companies that have large export operations also need to look into the international political arena as well. This provides insight into how external political factors will change the industry.

Demographic analysis is important in an industry. This information looks specifically at the individual consumers who purchase cars. The car market analysis often details consumer age, sex, income, material status, and other information. In most cases, demographic analyses may come from third-party providers, then analysts place them into the car market analysis report. Again, international automobile companies need demographics on domestic and international markets.

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Economic factors also play a role in this report. The total market as a whole and the current status of the economy are all-important factors to know. Additionally, the amount and cost of resources can make a difference in how automobile manufacturers work in the economy. For example, rising inflation on resources used in production can result in changes to the manufacturer's price plans or use of quality intermediate goods for production.

Technology changes rapidly, with the automobile industry becoming one of the biggest users of new technological resources. Not only can manufacturers change the way they produce goods but also the included components in the cars they sell. A car market analysis often lists current technology used and newer technology that may be useful in newly produced vehicles. Additionally, the development of hybrid and electric cars may also be included here as these are becoming more important in the automobile industry.

Cultural aspects of the automobile industry are also important. Consumer perception of cars and societal norms can all play roles in car market analysis. Environmental concerns can also play a role in how consumers perceive both manufacturers and the cars they produce.

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