Application of Four Major Methodologies in Projecting New Car Sales in California Illustrates the Problems of— Regional Industry Forecasting

The UCLA Graduate School of Business Administration is developing estimates of gross regional product for Southern California. This type of information will be very useful in analyzing regional economic trends.

2.7% × 4.99%3.24% = 4.2%. Applying a 4.2 per cent growth rate to base of 518,000 (sec Table I), a computed volume of 750,000 is obtained.

4.2 per cent growth rate applied to the base of 784,000 (see Table I) produces a computed volume of 1,045,000.

Census data on retail sales by states are available which show dollar sales of California new car dealers for 1929 and 1939. If Method C had been used in 1929 to forecast 1939, the forecast sales would have been 8.5 per cent higher than they actually were in 1939. As later experience showed, California accounted for an unusually high percentage of new car sales in 1929 and this condition led to the forecasting error on the high side.

A new car purchased outside the state and registered in another state before being brought to California is defined as a used car.