Demand forecasting of diesel passenger car considering consumer preference and government regulation in South Korea

Changing market regulations in South Korea have allowed diesel-fueled passenger cars in the domestic market. The diffusion of diesel cars is tied to issues of environmental impact, energy supply and demand, and changes in tax revenue. Policymakers can influence demand for diesel vehicles to protect social welfare and to observe international environmental protection laws. On the supply side, carmakers need to know consumer preferences regarding new vehicles to arrive at development strategies.This study uses microsimulated demand forecasting to address these issues and predict consumer demand for diesel passenger cars. The model accommodates governmental policies and car attributes such as price and engine efficiency. We find that consumers will likely prefer diesel passenger cars to gasoline ones due to the low operation costs of the former in spite of high purchase price when diesel is relatively cheaper than gasoline. Finally we find that diesel passenger cars will capture a 42% market penetration ratio under the pricing system suggested by the Ministry of Environment of Korea.     

Improving the behavioral realism of global integrated assessment models: An application to consumers’ vehicle choices

A large body of transport sector-focused research recognizes the complexity of human behavior in relation to mobility. Yet, global integrated assessment models (IAMs), which are widely used to evaluate the costs, potentials, and consequences of different greenhouse gas emission trajectories over the medium-to-long term, typically represent behavior and the end use of energy as a simple rational choice between available alternatives, even though abundant empirical evidence shows that real-world decision making is more complex and less routinely rational. This paper demonstrates the value of incorporating certain features of consumer behavior in IAMs, focusing on light-duty vehicle (LDV) purchase decisions. An innovative model formulation is developed to represent heterogeneous consumer groups with varying preferences for vehicle novelty, range, refueling/recharging availability, and variety. The formulation is then implemented in the transport module of MESSAGE-Transport, a global IAM, although it also has the generic flexibility to be applied in energy-economy models with varying set-ups. Comparison of conventional and ‘behaviorally-realistic’ model runs with respect to vehicle purchase decisions shows that consumer preferences may slow down the transition to alternative fuel (low-carbon) vehicles. Consequently, stronger price-based incentives and/or non-price based measures may be needed to transform the global fleet of passenger vehicles, at least in the initial market phases of novel alternatives. Otherwise, the mitigation burden borne by other transport sub-sectors and other energy sectors could be higher than previously estimated. More generally, capturing behavioral features of energy consumers in global IAMs increases their usefulness to policy makers by allowing a more realistic assessment of a more diverse suite of policies.     

Positive and negative spillover effects from electric car purchase to car use

This study reports the results of two online surveys conducted on buyers of conventional combustion engine cars compared to those of electric vehicles in Norway. The results show that electric cars are generally purchased as additional cars, do not contribute to a decrease in annual mileage if the old car is not substituted, and that electric car buyers use the car more often for their everyday mobility. Psychological determinants derived from the theory of planned behavior and the norm-activation theory show a high correlation between the purchase and use stages. Electric car buyers, have lower scores on many determinants of car use, especially awareness of consequences and close determinants of car use.     

An empirical investigation of the impact of behavioural and psychographic consumer characteristics on car preferences: An integrated model of car type choice

Based on the data collected from a large-scale survey research of 1622 consumers, the present paper develops a disaggregate, compensatory choice model to collectively examine the impact of under-examined factors on consumer car type choice behaviour. All existing econometric forecasting models of vehicle type choice in the literature have so far considered objective measures as determinants of vehicle type choice. The proposed choice model considers 12 car-type alternatives and is successively extended to allow for choice probability distortions resulting from individual heterogeneity across a set of 30 variables, related to objective, behavioural and psychographic consumer characteristics. The results provide clear evidence that variables such as purpose of car use, prepurchase information source used, consumer’s proneness towards buying an ecological car, consumer’s involvement with cars, and consumer’s attachment to cars, significantly affect car type choice. The results yield important implications for manufacturers, transportation planners and researchers.     

Consumer purchase intentions for flexible-fuel and hybrid-electric vehicles

This study explores the factors that influence consumer likelihood of purchasing two different types of alternative-fuel vehicles – flexible fuel and hybrid-electric. Data for the study come from an online survey of US automobile owners. Results suggest that concerns about energy security, the environment, and the availability of alternative fuels, along with demographic factors, have significant effects on consumer purchase expectations for alternative-fuel vehicles.     

Consumer attitudes about electric cars: Pricing analysis and policy implications

As electric vehicles (EVs) become more readily available, sales will depend on consumers’ interest and understanding. A survey of consumer attitudes on electric cars was conducted in Manitoba from late 2011 to early 2012. It utilizes two price assessment methods. The van Westendorp price sensitivity method (PSM) shows the acceptable price range for EVs to be $22,000–27,500. This range closely matches average price range for sales of conventional cars during the same period. The willingness-to-pay method reveals consumers are unwilling to pay large premiums for EVs, even when given information on future fuel savings. A consumer group with experience or exposure to EVs is somewhat different. Nearly 25% of these people are willing to pay a premium of up to $10,000. Different interpretations can be drawn from these responses, calling for further research. An apparent policy opportunity involves consumer education to enhance knowledge and facilitate EV purchase decisions. Survey results also support the hypothesis that EV rollout has focused too much on technology, and not enough on consumers.     

Automotive fuel economy improvements and consumers' surplus

The change in consumers' surplus resulting from the alteration of automobile characteristics to achieve greater fuel economy is estimated. Measures of surplus change based on random utility models of consumer choice are calculated using data on the characteristics of makes and models from 1978 to 1985. Random utility models with constant and random coefficients are used. Though highly dependent on assumed attribute values, the results suggest that consumer surplus gains have been roughly equal in magnitude to the increased retail price of more efficient cars.     

Impact of electric vehicles on existing car usage: A mixed multiple discrete–continuous extreme value model approach

This study investigates how the introduction of electric vehicles may influence the usage of existing cars. A survey of 250 households in South Korea is used to analyze a future automobile market that includes electric vehicles taking into account the heterogeneity of consumer preferences and usage patterns. Based on consumer preferences, the future market share of various vehicles is estimated and the impact of promoting the usage of electric vehicles by government subsidization and tax incentives is analyzed.     

Forecasting petrol demand and assessing the impact of selective strategies to reduce fuel consumption

Abstract

The use of fossil fuels in transportation is an important topic as a result of growing concerns over global warming. Automobile petrol demand has been of particular interest to researchers and policy-makers, given that the automobile is a major contributor to the enhanced greenhouse effect. This paper forecasts Australia's automobile petrol demand up to the year 2020 based on the best performing forecasting model selected out of eight models. In order to establish ways to reduce the demand for petrol, and the consequent by-product of reducing the amount of greenhouse gas emissions, we have estimated the impact on CO₂ for several potential policy instruments, using Transportation and Environment Strategy Impact Simulator (an integrated transport, land use and environmental strategy impact simulation programme). We find that a carbon tax of AU$0.50/kg can reduce automobile kilometres by 5.9%, resulting in reduced demand for petrol and a reduction in CO₂ of 1.5%.     

Consumer purchase intentions for electric vehicles: Is green more important than price and range?

In view of global warming and climate change, a transition from combustion to electric vehicles (EVs) can help to reduce greenhouse gas emissions and improve air quality. However, high acquisition costs and short driving ranges are considered to be main factors which impede the diffusion of EVs. Since electricity needs to be produced from renewable energy sources for EVs to be a true green alternative, the environmental performance of EVs is also presumed to be an important factor. This paper investigates the role of environmental performance compared to price value and range confidence regarding consumer purchase intentions for EVs. To develop our hypothesis, we interview 40 end-user subjects about their beliefs toward EVs. Then, we perform 167 test drives with a plug-in battery EV and conduct a survey with the participants to test the hypothesis. Results of a structural equation modeling support the hypothesis that the environmental performance of EVs is a stronger predictor of attitude and thus purchase intention than price value and range confidence.     

Mainstream consumers driving plug-in battery-electric and plug-in hybrid electric cars: A qualitative analysis of responses and evaluations

Plug-in electric vehicles can potentially emit substantially lower CO₂ emissions than internal combustion engine vehicles, and so have the potential to reduce transport emissions without curtailing personal car use. Assessing the potential uptake of these new categories of vehicles requires an understanding of likely consumer responses. Previous in-depth explorations of appraisals and evaluations of electric vehicles have tended to focus on ‘early adopters’, who may not represent mainstream consumers. This paper reports a qualitative analysis of responses to electric cars, based on semi-structured interviews conducted with 40 UK non-commercial drivers (20 males, 20 females; age 24-70 years) at the end of a seven-day period of using a battery electric car (20 participants) or a plug-in hybrid car (20 participants). Six core categories of response were identified: (1) cost minimisation; (2) vehicle confidence; (3) vehicle adaptation demands; (4) environmental beliefs; (5) impression management; and, underpinning all other categories, (6) the perception of electric cars generally as ‘work in progress’ products. Results highlight potential barriers to the uptake of current-generation (2010) plug-in electric cars by mainstream consumers. These include the prioritization of personal mobility needs over environmental benefits, concerns over the social desirability of electric vehicle use, and the expectation that rapid technological and infrastructural developments will make current models obsolete. Implications for the potential uptake of future electric vehicles are discussed.     

Motivating small-displacement car purchasing in China

Due to the rapid development of the automobile industry and the ever-increasing quantities of produced and sold automobiles in China, many problems such as fuel scarcity and air pollution have emerged. To alleviate such problems, one solution is to promote households to purchase small-displacement (engine) cars (SDCs). Based on the theory of planned behavior, we develop a theoretical framework to examine how influencing factors such as environmental attitude, subjective norm, self-image and environmental knowledge motivate SDC purchasing behavior through SDC purchasing intention in China. We further extend the research framework to examine whether the factor of economic incentives moderates the relationships between SDC purchasing intention and behaviors. Using an empirical study with 232 usable questionnaire responses, we observe that SDC purchasing intention partly mediates the relationship between three of four influencing factors (environmental attitude, self-image, environmental knowledge) and SDC purchasing behavior. Statistical results also show that the factor of economic incentives moderates the relationship between SDC purchasing intention and behavior. Our results indicate that three of four influencing factors can yield SDC purchasing behavior, especially when SDC purchasing intention exists. Economic incentives such as financial support from the government could promote SDC purchasing intention to transform into purchasing behavior.     

A model system for the assessment of the effects of car and fuel green taxes on CO2 emission

This study aims at developing a model system to examine the changes in the car market configuration, the life cycle CO₂ emission from automobile transport and the tax revenues due to different taxation policies. The model system specifically determines the effect of varying the weights of the tax components in the stages of a) car purchasing, b) car owning, and c) car using to the changes in the car class and age mix and the car users' driving pattern and behavior towards car class choice and decommissioning. Five sub-models comprise the model system, formulated using car ownership related data in Japan from 1980 to 1994. Performance tests conducted against the sub-models generally yielded encouraging results. The sensitivity analysis identified car usage tax as the most significant parameters in reducing CO₂. An increase in, ownership tax, on the other hand, significantly results to a shift to smaller cars, while the propensity to decommission and repurchase can be reduced by increasing the purchase tax and can be decreased by increasing the ownership tax. The model system was utilized to determine the impact of the 1989 tax reform and to forecast future scenarios using different taxation schemes. The model system is being further developed for possible future application in other countries.     

Forecasting automobile demand using disaggregate choice models

This paper presents a simulation model of the American automobile market. The simulation model combines a disaggregate model of household automobile number and type choice with an econometric model of used vehicle scrappage and simple models of new car supply. For fixed vehicle designs, consumer and producer interactions determine new car sales, used car scrappage and consumer vehicle holdings. The model allows automobiles to be highly differentiated and consumers to be heterogeneous. Short-run equilibrium is defined as supply equal to demand for every vehicle type during each market period. The automobile stock then evolves slowly as new vehicles are added and old vehicles are removed during each period. An empirical application of the simulation model with 12 consumer groups and 131 vehicle types is used to forecast automobile holdings. A base case scenario is run for 1978–1984 and compared with the observed market behavior during this period. Several other simulations are then run comparing different gasoline price scenarios with the base case for 1984–1990.     

Factors affecting consumer assessment of eco-labeled vehicles

A statewide sample of Maine registered vehicle owners is used to examine factors that affect their assessments of eco-labeled conventionally fueled passenger vehicles. The study focuses on developing an empirical and theoretical framework with which to model vehicle choice decisions under eco-labeled conditions. Particular attention is paid to how eco-information may affect the two-stage vehicle purchase process. The study builds upon environmental economic and psychology literature in examining the role of personal characteristics such as perceived effectiveness of consumer purchase decisions and perceptions of the eco-labeled products as factors in the vehicle purchase decision. It was found that environmental attributes of an eco-labeled passenger vehicle are significant in the purchase decision. The eco-information is considered in the vehicle purchase decision, but is generally not considered at the class-level decision.     

The effect of the oil crisis on the growth in the ownership and use of cars

Since the oil crisis of 1973, a number of studies have been made in various countries of the effects of the rise in petrol prices on the level of traffic flow, but rather fewer have attempted to delineate the complex chain of reactions within the car market set off by this impulse. We attempt to do this, using data from the UK.Since 1966 during the prediction stage of the first London Transportation Study it became obvious that low income and high income households had different rates of growth of car ownership, mainly because low income households bought cheap, old cars which vary in quantity and price differently from expensive, new cars. The Greater London Council therefore sponsored a study of car prices by age and size, starting from 1957 annually, and since the oil crisis, evaluated monthly. This has enabled us to examine the strong change in trend that had occurred, with large cars depreciating 15% per annum more than the smallest. The quantities of cars of each size registered each month are available from national statistics and this enables us to say that the previous 1% per annum increase in car size was arrested, with new cars becoming substantially smaller.A model of the car market has been developed which relates on the one hand the price distribution of cars by age, and on the other hand the price. distribution of the stock of cars owned at each household income level. Via the expenditure on car purchase at each household income level and the distribution of the length of time between purchase and resale of cars, a fully dynamic model has been developed to relate expenditure flow and stock. This enables us to test the effect of different trends on the dynamic equilibrium in the car market.The implications of the two trends noted above on the prediction of future car ownership growth are discussed, with the standstill since the oil crisis attributed to petrol prices via the split in household expenditure between purchase and use.     

Measuring the satisfaction of multimodal travelers for local transit services in different urban contexts

The importance of measuring customer satisfaction for a public transport service is apparent, even beyond more immediate marketing purposes. The present paper shows how satisfaction measures can be exploited to gain insights on the relationship between personal attitudes, transit use and urban context. We consider nine satisfaction measures of urban transit services, as expressed by a representative sample of Italian multimodal travelers (i.e. users of both private cars and public transport). We use correlations and correspondence analyses to show if and how each attribute is related to the levels of use of public transport, and how the relationship is affected by the urban context. Then we apply a recently developed method to combine ordinal variables into one score, by adapting it to work with large samples and with satisfaction measures which have a neutral point in the scale (i.e. “neither satisfied nor dissatisfied”). The resulting overall satisfaction levels and frequency of use were not correlated in our sample. We also found the highest satisfaction levels in smaller towns and the lowest ones in metropolitan cities. Since we focus on multimodal travelers, an interpretation paradigm is proposed according to which transit services must be well evaluated by car drivers in smaller towns in order to be considered a real alternative to cars. On the other hand, transit is more competitive on factual elements in larger cities, so that it can still be used by drivers, even if it is not very well evaluated.     

Hybrid cars and HOV lanes

The 2005 California Clean Air Access Sticker program offered stickers to owners of hybrid cars allowing unrestricted access to High Occupancy Vehicle lanes. The program was conceived as a zero-cost mechanism to encourage purchase of hybrid cars and to reduce air pollution. Information from sales of used hybrids allows us to estimate sticker market value. We then derive the value of excess HOV space the hybrids occupied, which is considerably greater than the air pollution benefits achieved. A more effective policy would sell space to drivers of any vehicle and use the revenue to stimulate hybrid demand, preferably via direct subsidy.     

Implications of current household vehicle ownership and use patterns on the feasibility of electric cars

Electric cars provide the convenience and mobility of internal combustion engine vehicles without their dependence on fossil fuels or their associated environmental problems. While range constraints continue to limit their ultimate market acceptance, recent changes in the automotive marketplace have made American consumers more energy conscious. This paper examines a recently conducted U.S. survey of household travel behavior. The objective of the analysis is to determine the implications of observed vehicle ownership and use patterns on the feasibility of limited performance vehicles. Several factors are identified which serve to enhance the potential market penetration of electric cars. Included here are the recent growth in multiple vehicle ownership, and significant functional specialization in household allocation of vehicle use. On the other hand, it is pointed out that the substitutability of electric cars with the majority of currently owned vehicles is not clear by virtue of either their seating capacity, luggage space, or other specialized characteristics. Moreover, it is shown that the majority of secondary household cars are purchased used, which raises questions on the cost competitiveness of electric cars.The analysis of household daily driving range confirms the finding from previous studies that currently available electric vehicle technology can serve over 95 percent of vehicle travel requirements. However, serious flaws are pointed out in the use of cross sectional travel diaries for such analyses, raising questions as to the validity of the results. Overall, it is concluded that the ultimate potential size of the electric vehicle market with current technology is about one third of U.S. household vehicles, representing approximately one fifth of total non-commercial VKT. However, more research is needed to assess whether functionally feasible electric vehicles can actually be competitive under market conditions.