Bespoke automotive sector sales forecasting
Leveraging macroeconomics to understand a complex sales channel and provide the robust data necessary for forecasting and planning.
Download PDF
Background
Automotive companies face many challenges: regulations, emission controls, litigation, political uncertainty, complex and problematic supply chains and disruptive technology are perhaps among the most pressing. At the same time, changing consumer requirements, high fuel prices and interest rate rises are impacting the demand for products. It’s at uncertain times like these that accurate forecast data are crucial for production and distribution planning.
The Challenge
Regional sales directors and planners across the automotive industry face two major known unknowns when gathering the data needed for forecasting and planning purposes: how the market will behave in the coming quarters and years; and the accuracy of local teams’ sales forecasts.
A regional sales director for a large global automotive manufacturer had concerns over his region’s sales forecast. And, as it was one of the manufacturer’s largest markets, he knew errors would significantly undermine the overall business’s production and distribution planning.
The best knowledge of prospects is at the local and country level. Yet the sales director was concerned that the compensation structure meant there was an incentive for country managers to forecast low to outperform targets. So the client approached Oxford Economics to develop independent forecasts across a selection of economies from across the world to enable them to benchmark and challenge the country sales managers’ forecasts as necessary.
The client wanted to take a collaborative approach to the project, combining their own market-specific intelligence with Oxford Economics’ technical know-how to produce a set of reliable and robust forecasts integrated with Oxford Economics’ databases for periodic refreshes throughout the year.
The Solution
Drawing on our expertise in econometric analysis and customised sales forecasting, we developed a sales forecasting model with excellent predictive power by analysing the relationship between automotive sales and macroeconomic driver variables.
The explanatory variables in the model were all included in the Oxford Economics Global Economic Databank, meaning that the client’s team could independently refresh the forecasts instantly using the Oxford Economics Excel plug-in when our global economists update their macroeconomic forecasts each month.
We delivered the forecasts in a user-friendly MS Excel tool, with all forecast equations and data sources integrated. In addition, a range of charts and drop-down menus enable the team to digest the forecast results instantly. The tool also included scenario functionality.
The Result
The bespoke forecasting model we developed provided the client with a set of independent, reliable and accurate forecasts to facilitate their forward planning. As a result, the client now has a much more comprehensive and robust framework to validate and challenge the forecasts provided by country-level sales managers, giving them confidence and conviction in their strategic decision-making processes. The tool delivered also allows the client to easily update the forecasts for the latest data inputs and macroeconomic drivers, as well as conduct sensitivity analysis around the macroeconomic drivers, which adds an extra risk-analysis dimension to their forecasts which country sales managers were unable to provide.
Related services
Bespoke Forecasting and Scenarios
Supporting strategy, policy, and risk appraisal with quantitative analysis tailored to your organisation.
Find Out More
Thought Leadership
High-impact, evidence-based narratives to help executives run their organisations more sustainably and profitably.
Find Out More
Economic Impact
Quantifying the economic, social, and environmental impact of government policies, new investments, technological innovations, industries, and companies at a global, national, or local level.
Find Out More
Industry Consulting
Translate what the broader questions around key economic and sector trends, risk, technology disruptors, as well as policy and regulatory changes mean for your organisation.
Find Out More