The paper "Business Forecasting - Car Industry in Australia " is an outstanding example of a business case study. The car industry in Australia has witnessed a steady growth during the past ten years with an average per month sale of the vehicles equivalent to approximately eighty thousand units per month. The increase in sale is the direct result of the economic progress with an increase in population and per capita income at the national level. The social trends and the nature of the use of the vehicles have been changed from an item of luxury to an item of necessity for daily use in the lives of the Australians.
The insurance business relating to cars has a bright future in the country as more and more vehicles are being injected into the market by the car manufacturing units and the import of the items from the outside world. The terms and conditions as offered by the insurance company are attractive in nature as the company has planned to offer insurance claims relating to scratches and minor accidents also. The company has planned to charge the premium at the rate of 0.5% of the total value of the vehicle.
The chances of the business as to turn into a profitable business in Australia are bright as the company is offering insurance claims on the minor accidents, minor damages on the interior and even scratches on the vehicles. The traffic rules and their rate of observance are very high, therefore, it is expected that the company will earn a revenue of average 144 million AUD $. The figures have been calculated at the rate of approximately 960000 vehicles with an average price of AUD $ 30000 and the amount of premium as 0.5% of the total cost.
It is expected that the company will return an insurance claim as are expected to be made approximately 15% of the total generated revenue, 10% as legal charges and 25% as the administrative charges as to be incurred by the company while executing the insurance business in Australia. The net income in favor of the company will be 72.00 million AUD $ approximately. Introduction: The business forecasting is a tool used to predict about the future marketing trends for the sales of cars in the Australian market.
The forecasting for the insurance business in the sector is a significant input for making strategic decisions relating to the level of investment and to hire relevant staff for the execution of the business plan. The business forecasting in the insurance sector relating to the cars in Australia is based on quantitative data as collected on time series basis as on a monthly basis. The forecasting has been completed with the assumption that the sector will observe the trends as were witnessed during the past ten years in the country. The sale trends of cars of all makes and models have witnessed a steady rising pattern depending upon the conditions that all other variables will remain the same.
Per capita income, GDP growth rate and population of the country are all in the positive zone and these factors will promote the sales of the cars. The company has selected an optimum time period for the initiation of the business that is from June 2009 to May 2010 and the previous records have shown that the sales of the cards are on the high side during June – September and during the period the company will establish itself in the market and in the subsequent months the business will be executed as per designed activities relating to the business.
1. Davis, Mark; Dowling, Josh; Norrie, Justin (5 February 2008). "Mitsubishi plant to close in March". The Sydney Morning Herald. http://business.smh.com.au/mitsubishi-plant-to-close-in-march/20080204-1q24.html. Retrieved on 5 February 2008.