Automobile Sales and Macroeconomic Variables: A Pooled Mean Group Analysis for Asean Countries

Abstract

The objective of this paper is to analyse the impact of economic variables on automobile sales in five ASEAN countries. The long term and short term correlation between these variables are implemented using the panel error-correction model. Annual data from 1996 to 2010 involving five variables from five ASEAN countries namely Malaysia, Singapore, Thailand, Philippines and Thailand were accumulated as sample for this research. Result from the test shows that gross domestic product (GDP), inflation (CPI), unemployment rate (UNEMP) and loan rate (LR) have significant long term correlation with automobile sales in these ASEAN countries. The value of error correction in the short term to achieve long term stability based on ECT parameter is found to be significant in Malaysia, Singapore and Thailand. On the other hand, each country is influenced by different variables in the short term period.