Hybrid car sales ( Ford case )

1. Factors effecting Hybrid Car
sales in the United States
- A case of Ford Fusion
Mohammad Shafiq Obeidat
Wilmington University
DBA

2. Executive Summary
The Ford Fusion Hybrid is a gasoline-electric hybrid powered
version of the mid-size Ford Fusion sedan developed by the Ford
Motor Company, and launched to the U.S. market in 2009.
15,554
20,816
11,286
-
5,000
10,000
15,000
20,000
25,000
2009 2010 2011
Ford Fusion Sales
The graph shows number of cars Ford has sold the in the US since
it’s launch:
With so many
excellent midsize
hybrids on the
market, the
competition is tough.
This study aims to
provide some insight
into the driving
factors for Hybrid
car sales.

3. Problem Statement
As shown in the table, the
top ten hybrid cars (based
on the market share) with
their sales share in
2009, 2010 and 2011.
The data shows that Ford
Fusion rose from 5.4% of
market in 2009 to 7.6% in
2010 but then fell 4.2%
losing its sales to other
competitors.
2009 2010 2011
Toyota Prius 48.1% 51.4% 50.8%
Hyundai Sonata 0.0% 0.0% 7.3%
Honda Insight 7.1% 7.6% 5.8%
Lexus CT 200h 0.0% 0.0% 5.4%
Honda CR-Z 0.0% 1.9% 4.2%
Ford Fusion 5.4% 7.6% 4.2%
Lexus RX400h 5.0% 5.5% 4.0%
Ford Escape 5.1% 4.1% 3.8%
Toyota Camry 7.9% 5.3% 3.4%
Ford Lincoln MKZ 0.0% 0.4% 2.1%
Market Share (Top ten Hybrid cars)
This study aims to find factors affecting the sales of hybrid cars in
the US and to make recommendations to the Ford management.

4. Statistical Evidence
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
NumberofHybridcarssold
Year
Number of Hybrid Cars Sales in United States

5. Statistical Evidence
0
100,000
200,000
300,000
400,000
NumberofHybridcars
sold
Year
Number of Hybrid Cars Sales
in United States
The graph shows the total number of Hybrid car of all makes and
models sold per annum in the United States of America from
1999 to 2011
An exponential rise can be seen in the sales from 1999 to 2007.
The sales started souring after 2007 and haven’t seen a growth
up until 2011.
Since the US market for hybrid cars is getting bigger with over a
quarter of a million cars sold per annum , there is a need to
understand the economic factors that lead the hybrid car sales to
rise of fall, to be able to predict and demand and target the
market.

6. Statistical Evidence
The correlations table below shows that there is a strong correlations
between ‘Total Hybrid cars sales in the Us’ and ‘Per Capita GDP of US’
(Sig. 2-tailed = 0.000 < 0.05) . The correlation of the sales is also very
strong with ‘Total GDP of US’ (Sig. <0.05) but not with ‘Growth Rate
Percent’ (Sig. > 0.05).
This implies that an increase in the sales of hybrid cars in the US is
accompanied by an increase in the ‘Per capita’ and ‘Total’ GDP of the
country. Correlations
TotalHybridCars
Sales
PerCapitaGDPU
S$
GrowthratePerce
nt
GDPatcurrentpri
cesUS$
TotalHybridCarsSales
Pearson Correlation 1 .964
**
-.527 .953
**
Sig. (2-tailed) .000 .064 .000
N 13 13 13 13
PerCapitaGDPUS$
Pearson Correlation .964
**
1 -.507 .998
**
Sig. (2-tailed) .000 .077 .000
N 13 13 13 13
GrowthratePercent
Pearson Correlation -.527 -.507 1 -.519
Sig. (2-tailed) .064 .077 .069
N 13 13 13 13
GDPatcurrentpricesUS$
Pearson Correlation .953
**
.998
**
-.519 1
Sig. (2-tailed) .000 .000 .069
N 13 13 13 13
**. Correlation is significant at the 0.01 level (2-tailed).

7. Statistical Evidence
Now, we conduct a regression analysis to check the relationship between
these variables, and get to an equation to be able to predict the hybrid
car sales.
In this model, ‘Total are the independenHybrid Car Sales’ is the
dependent or outcome variable; and ‘Total GDP’, ‘Per Capita GDP’ and
‘Growth Rate’ t variables.
Model Summary
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .976
a
.953 .938 33265.747
a. Predictors: (Constant), GrowthratePercent, PerCapitaGDPUS$,
GDPatcurrentpricesUS$
ANOVA
a
Model Sum of Squares df Mean Square F Sig.
1
Regression
204219271762.
953
3 68073090587.6
51
61.515 .000
b
Residual
9959489255.97
0
9 1106609917.33
0
Total
214178761018.
923
12
a. Dependent Variable: TotalHybridCarsSales
b. Predictors: (Constant), GrowthratePercent, PerCapitaGDPUS$, GDPatcurrentpricesUS$
Looking at R and R Square values
in the Model Summary table, shows
that over 93% of variance can be
explained by this model which is
very strong.
The ANOVA table
shows the analysis of
variance. Looking at
the Sig. value
(0.000), the
regression model is
statistically
significant.

8. Statistical Evidence
The Coefficients table actually gives us the relationship we are looking
for.
Looking at the Sig. column, both ‘Growth rate’ and ‘Total GDP’ have a
value of >0.05 which indicates that they do not significantly help predict
the sales of hybrid cars in the US. However, ‘Per Capita GDP’ has a
value <0.05 indicating a statistically significant relationship in predicting
the car sales.
The regression analysis shows that an increase in $87.81 in annual per
capita income leads to the sale of one more car in the United States.
Coefficients
a
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) -1382832.399 277155.973 -4.989 .001
GDPatcurrentpricesUS$ -1.682E-007 .000 -2.451 -2.087 .067
PerCapitaGDPUS$ 87.807 30.423 3.361 2.886 .018
GrowthratePercent -6328.172 5645.736 -.096 -1.121 .291
a. Dependent Variable: TotalHybridCarsSales

9. Management Recommendation
The study showed that the economic macro factor that the sales
of hybrid cars in the US depend on is the average annual income
of a person in the country.
This is a helpful insight for the management in order to work
towards promoting Ford Fusion Hybrid sales. The overall
demand can be predicted using per capita income and Ford
should look into calculating and achieving a target sales of
Fusion hybrid to maintain and grow its market share in the
country.