Case studies
Title: Short-term and long term demand forecast models across vehicle segments Objective: The objective of the study was to provide technical assistance to the client for demand forecasting across vehicle segments Approach: CRISIL Research developed separate demand forecast models for each of the vehicle segments. CRISIL Research developed demand forecast models, which considered new vehicle as well as replacement demand . For new vehicle demand forecasts ,CRISIL Research analysed various parameters such as income distribution, cost of ownership and supply variables (new launches, capacities, used car availability, price points). For short term demand assessment, we analysed economic factors (GDP, corporate profit, etc.), financial variables (int. rate, EMI, finance penetration), supply factors (vehicle cost, fuel cost, model launches), demographics and infrastructure.
For replacement demand forecasts, CRISIL Research analysed demand variables (avg. holding period, purchase transition matrix, propensity to own multiple cars) and supply variables (new launches, capacities, used car availability, price points). Commercial vehicle demand model analysed factors such as redistribution freight availability, impact of competing products and structural changes in the redistribution factor. Value to Client: CRISIL Research assisted client to decide on the investment planning strategy based on demand forecasts and scenario analysis carried out with the help of the models developed.
The approach framework for the study is formulated and discussed with client This outlines broadly the process and tentative timelines for the study
To assess the demand for each of the vehicle segments, we take into account both macro and micro level factors We assess the relationship between sales and each of the demand drivers We classify these factors into issues impacting demand for vehicles
We analyse the relative favourability of factors driving the demand for each of the vehicle segments We analyse the relative impact on both short-term and long-term basis to arrive at the projections We develop econometric models and club judgmental factors to finalise projections Post final projections, we back-test to evaluate the robustness of the framework and methodology
Case studies
Title: Benchmarking for a leading automobile manufacturer Objective: The client wanted a peer group comparative analysis on financial as well as non-financial parameters and assessment of their relative performance with reasons for differences thereof Approach: CRISIL Research provided the study in three modules as follows: Benchmarking on performance based on financial parameters, growth trends, export potential etc. Relative analysis of cost-structures and operations efficiency. Competitive position based on product portfolio, distribution network and marketing strategies for new and existing products.
Value to Client: CRISIL Research assisted the client to understand its current market position based on comparables and helped to strengthen its competitive position by identifying areas for improvement and focusing on strengths
The approach framework for the study is formulated and discussed with client The framework involved measurement of business performance of peers based on assessment of underlying drivers of business performance
To assess the overall business performance, the assessment framework is divided into benchmarking of business performance and benchmarking the drivers of business performance Business performance of players is measured in three areas, viz. financial performance, domestic market performance and quality performance The drivers of business performance are categorised into 4 factors: product development capability, vendor management, operating efficiency and sales & service These parameters are measured using various metrics and assigned scores on 1-5 scale, wherein a score of 1 indicates poor performance and 5 indicates strong performance Subsequently, scores of relevant parameters are aggregated into four factors and finally into overall competitive score for each player
Case studies
Title: State-wise monthly forecasting for tractor demand Objective: The client intended to build a robust methodology for forecasting demand for tractors in Indian market Approach: Short term forecasting of tractor demand was based upon a weighted average score on key factors that can drive tractor demand in the short term. The scores was estimated based on information updated monthly. Based on the scores the rate of demand growth was qualitatively estimated by suitably adjusting the recent growth trend Interactions with dealers of client and its major competitors at various locations were done to assess various factors contributing to the movement in demand overtime. An in-house designed questionnaire was shared with the regional/zonal sales managers of the client on a monthly basis to garner feedback/validation on the regional analysis A framework was prepared for scoring assessment categorising factors that influence tractor demand into those related to economics of tractor operation and those related to affordability of tractors Value to Client: CRISIL Research assisted the client to plan their production and in turn sales based on the forecasted numbers and accordingly bring focus towards respective state-wise sales
The approach framework for the study is formulated and discussed with client This outlines broadly the process and tentative timelines for the study
State wise rolling forecast begins with analysis of long term trends using the structural and cyclical parameters over the next one year To estimate the short-term forecast, weighted average score on key factors that can drive tractor demand in the short term, further adjusted for seasonal factors, is taken Primary interactions with dealers, farmers and financiers are done
We analyse the relative favourability of factors driving the demand for each of the HP segments We analyse the relative impact on both short-term and long-term basis to arrive at the projections We develop statistical models and club judgmental factors to finalise projections Post final projections, we back-test to evaluate the robustness of the framework and methodology