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

Jongsu Lee, Youngsang Cho

Research output: Contribution to journalArticle

17 Citations (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)420-429
Number of pages10
JournalTransportation Research Part A: Policy and Practice
Volume43
Issue number4
DOIs
Publication statusPublished - 2009 May 1

Fingerprint

Passenger cars
South Korea
motor vehicle
regulation
demand
Gasoline
Railroad cars
energy shortage
energy supply
domestic market
tax revenue
market
Environmental protection
Taxation
development strategy
environmental protection
social welfare
Korea
ministry
Environmental impact

All Science Journal Classification (ASJC) codes

  • Civil and Structural Engineering
  • Transportation
  • Management Science and Operations Research

Cite this

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abstract = "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.",
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