Effects of government policy on a-segment vehicle market growth

Abstract

With the growing need for CO2 reductions in the transport sector, the use of fuel efficient vehicles; ve-hicles which consume less exhaust gases than the conventional vehicle, is considered to be one probable solu-tion. It is possible to include A-segment vehicles in the eco-friendly vehicle category due to its high fuel effi-ciency and low emissions. The initial access of A-segment vehicle is relatively easy and it has a comparable market size that can be analyzed alongside other eco-friendly vehicles. According to the Korean transportation statistics, A-segment vehicle sales were gradually decreasing since the year of 2000. But the sale flop-sided to an increasing trend after the year of 2008. This similar phenomenon was observed in all 16 provinces of Ko-rea, which resulted from the policy changes to extend the standards of A-segment vehicle from 800cc below to 1000cc below in 2008. A mixed effect beta regression model considering the demographic elements and characteristics of the region has been implemented to represent and analyze the phenomenon mentioned. The A-segment vehicle registration statistics, gas price, population, gender ratio, GRDP, single-person household rate, and female employment rate data from 2000 to 2010 were used in the analysis, as well as the complex cross-sectional and longitudinal analysis. This thesis proposes an appropriate A-segment vehicle policy for Korea and describes the elements that affect the diffusion of the A-segment vehicle into the society.