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INTRODUCTION
Program: 2009 U.S. “Cash - for - Clunkers”
Encourage to retire old and lower MPG vehicle and purchase higher
MPG vehicle
Duration:
July and August 2009
Objective:
Stimulate U.S. Economy
Put more fuel-efficient cars on the road
Incentive:
$3,500 or $4,500 credit
KEY DATA
• Duration:
• 30 days
• Number of Trade-In Vehicles:
• 677,984
• Government spent (incentives):
• $2.8 Billion
• Total sales (MSRP) of New Vehicles:
• $15 Billion (14.42 trillion GDP in 2009) (0.1%GDP)
• National Coverage:
• 55 Areas (50 States + 1 District + 4 Insular areas)
QUESTION
Identify the 10 most successful states and the 10 least
successful states.
Study the trade-in behavior of west coast consumers
against consumers from other areas.
Study the behavioral patterns of consumers purchasing
new vehicles.
Evaluate the conclusion “wildly successful” from
government.
METHODOLOGY
• Step 1: calculate the average MPG of trade-in vehicles in each state
(MPG-old)
• Step 2: calculate the average MPG of new vehicles in each state
(MPG-new )
• Step 3: calculate the MPG % increase.
(MPG-new – MPG-old) / MPG-old
• Step 4: sum the total trade-in vehicles in each state
• Step 5: get the total number of registered vehicles in each state (census.gov)
• Step 6: calculate the trade-in coverage ratio in each state
number of trade-in vehicles/ registered vehicles
eg: California
MPG % increase = 66%
Trade-in coverage ratio = 0.22%
Data Point of California CA(66%, 0.22%)
METHODOLOGY
Y-Axis: Trade-in Coverage Ratio
origin : ( Avg x, Avg y)
Successful Area
Least Successful Area
X-Axis: MPG % Increase
• 55 areas of data points
• Plot 55 areas of data points in the
quadrant
• X-Axis: MPG % increase
• Y-Axis: Trade-in Coverage Ratio
• Origin:
• Average of MPG % increase in
55 areas
• Average of Trade-in Coverage
Ratio in 55 areas
• First quartile -> best performance
• Third quartile -> worst performance
• Origin (59%, 0.27%)
• California(66%,0.22%)
California (66%, 0.22%)
Y- Axis:
Trade-in Coverage Ratio:
Max: 0.60%
Min: 0.01%
Avg: 0.27%
Median: 0.26%
X- Axis:
MPG % Increase:
Max: 66.08%
Min: 51.15%
Avg: 58.57%
Median: 57.73%
Threshold Line:
Slope of Line: K = Δ Y / Δ X
(Max Trade-in - Min Trade-in Ratio)
(Max MPG % - Min MPG %)
Successful
States:
Oregon
Colorado
Virginia
Minnesota
Connecticut
Maryland
Rhode Island
Vermont
Maine
New Hampshire
Least Successful
States:
Georgia
South Carolina
Hawaii
South Dakota
Arkansas
Alabama
Alaska
Mississippi
*District of Columbia
Wyoming
State Performance by MPG & Trade in
Coverage (Geographic Visualization)
State Performance by Sales
Successful States: California, Texas, New York, Florida, Illinois,
Pennsylvania, Ohio, Michigan, New Jersey,
Virginia
Least Successful States:*District of Columbia, Wyoming, Alaska,
Montana, Hawaii, North Dakota, Vermont,
South Dakota, Rhode Island, Delaware
THE PERFORMANCE OF
WEST COAST CONSUMERS
MPG % increase
in West Coast and other areas
*West Coast refers to the states of California, Oregon and Washington.
64.7%
58.2%
54.0%
56.0%
58.0%
60.0%
62.0%
64.0%
66.0%
West Coast Other Areas
% MPG increase
0.076%
0.006%
0.000%
0.010%
0.020%
0.030%
0.040%
0.050%
0.060%
0.070%
0.080%
0.090%
West Coast Other Areas
% Trade in coverage
Trade-in Coverage
in West Coast and other areas
• West Coast consumers purchased more fuel efficient vehicles than other
areas.
• MPG % increase in west coast is higher than other areas by 14%.
• Trade-in ratio coverage in west coast is 11 times grater than other areas.
MPG / Trade-in Ratio
• More percentage consumers in other areas switched from trucks to passenger
cars.
81%
63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
% truck in Trade-inVehicle in West Coast
% truck in NewVehicle in West Coast
Trucks
86%
42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
% truck in Trade-inVehicle in Other
Areas
% truck in NewVehicle Other
Areas
Trucks
In west coast, there are 81%
trade-in vehicles which are
trucks. In new purchased
vehicles, there are 63% are
trucks.
18% consumers switched from
trucks to passenger cars.
In other area, there are 86%
trade-in vehicles which are
trucks. In new purchased
vehicles, there are 42% are
trucks.
44% of the consumers switched
from trucks to passenger cars.
Type of Vehicles
4%
61%9%
26%
West Coast
EU Japan Korean US
3%
43%
12%
42%
Other Areas
EU Japan Korean US
• West coast consumers like to buy Japanese brand vehicles than other areas.
• 61% consumers purchased Japanese brand in west coast.
• Consumers in other areas bought more US brand vehicles than west coast.
• 42% consumers purchased US brand in other areas.
Brand of Vehicles
BEHAVIORAL PATTERNS OF
PURCHARSING NEW VEHICLES
Distribution of count number of Trade-in vehicles by age
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
% of the total
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
0K
10
K
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K
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K
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K
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K
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0K
Count of Trade In Odometer Reading
Odometer:
Avg: 130,000 miles
Median: 140,000
miles
Cutoff >400K
Year:
Avg: 12
Median: 14
Distribution of count number of Trade-in vehicles by mileage
• Most people choose to buy a new vehicle when their cars are around 12 years old
and 130K miles.
Average years of trade-in vehicle:
12 years
Average mileage of trade -in vehicle:
130,000 miles
Year and Mileage
EVALUATE THE CONCLUSION
“WILDLY SUCCESSFUL”
EVALUATE
• Government Perspective
• Number of trade-in vehicles
• Program duration
• Survey
• Sample size (21% response)
• Insignificant level
• Question Design
• Incremental sales even without program
• 12% will still purchase vehicles
• Held off purchase in June 2009
• Disposed trade-in vehicles
• Good condition vehicles will be destroyed
• Wheel or tires can’t be reused
• 2 of the top 3 new vehicles are Japanese brands
• Macroeconomic
• GDP
• Unemployment Rate
Purchase Motivation
National Brand Protection
Wasteful Resources
Not a Robust Survey
Sustainable development
DATA SOURCE:
C.A.R.S Program data:
http://www.nhtsa.gov/Laws+&+Regulations/CARS+Program+Transaction+Data+and+Rep
orts
VEHICLE REGISTRATIONS DATA:
http://www.census.gov/compendia/statab/cats/transportation/motor_vehicle_registrations_
alternative_fueled_vehicles.html• Automobiles, trucks, and buses (excludes motorcycles). Excludes vehicles owned by military services.
DATA CLEAN:
51 States (50 states + 1 Washington. DC)
Drop off four States: Guam Northern, Mariana Islands, Puerto Rico, Virgin Islands
(reason: no registrations information in census data)
DATA ANOMALIES
Trade in Odometer reading: 9,999,999, etc.
APPENDIX
THANK YOU
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