Effect of Fuel Prices on Automobile Sales in Pakistan

Abstract

The main reason to select the topic effect of Fuel Prices on automobile sales in Pakistan is that due to the continuous increase in inflation in Pakistan which leads to less purchasing power no matter of what sector it is. With this topic, we have checked how much the Petrol prices affect the sales of the automobile industry in Pakistan. Automobile sales are the variable that has been selected here for the research. Since a long time, the industry of automotive has been a growing and active field in Pakistan. However, it is not very established that an obvious list of top automotive industries can be figured out regardless of production volumes, localization of vehicle components, as well as technology's transfer, remains low. Majority of cars used in the country consist of both fuel options that are CNG as well as petrol. CNG have high affordability rate and is also less expensive than petrol which is considered as dependent variable. However, the cost of fuel is independent variable, i.e. 1,300 cc cars and 1,000 cc cars variable. The data of the monthly time series (secondary data) used from the period 2014 to 2018. To analyse the data, the regression technique has been applied. The conclusion of the analysis is that no automobile affects the production of automobiles due to the prices of gasoline. The cars are stable and even grow in a few years. This study is useful for the automotive industry to see the impact.