The objective of this research is to study and understand the relation between the oil prices and the sales of automobiles. The escalation in the petroleum prices plays a major role in the automobile industry worldwide. When the price of oil increases, it evidently alarms the automobile industry because the auto companies are in the competition with one another to fulfill the new demands for more fuel efficient consumer mindful at condensed price.
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Furthermore, rise in the petroleum prices also impacts the kind of means of transportation demanded by the buyer and the way those vehicle motors are designed. However after studying the oil price impact on Pakistanâ€™s automobile industry sales we have concluded that the relationship of oil prices and auto sales does not exists in Pakistan.
1.0 INTRODUCTION 1
The Impact of Rising Oil Prices on Automobile Sales: 1
Background of Pakistanâ€™s Automobile industry 4
2.0 LITERATURE REVIEW 5
4.0 RESEARCH METHOD 14
5.0 HYPOTHESIS TESTING 15
5.1 INDEPENDENT AND DEPENDENT VARIABLE 15
5.1.1 Independent Variable â€“ domestic oil prices 15
5.1.2 Dependent Variable â€“ Pakistanâ€™s Auto mobile Sales 16
6.0 DATA ANALYSIS: 17
7.0 CONCLUSION & IMPLICATIONS 19
8.0 REFERENCES 20
Table 6.1 ANOVA and level of Significance 18
Table 6.2: Regression Statistics of the tested variables 18
Impact of oil in daily life is quite evident. Oil is considered as a strategic energy for economic time line. The price of oil has an effect on cost of production in diversified ways such as with the increase in oil prices, there is an increase in the costs of transportation of export, import and goods for local expenditure. Apart from this there is also an upward slope in rates of air, road, rail and sea transportation with the rise in the price petroleum.
Oil endows with 97% of the transportation fuels that facilitates in running the trucks cars and other automobiles in the countryâ€™s highway. Thus, when the price of the oil increases, it evidently alarms the automobile industry because the auto-companies are in competition with one another to fulfill the new demands for more fuel proficient consumer mindful at condensed price. There are no reservations that profit margin of the companies are affected by this. Furthermore, rise in oil price also affects the kind of means of transportation demanded by the buyer and the way those vehicle motors are designed.
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