Here is why we recommend a hybrid approach to optimize for the most accurate forecast

Here is why we recommend a hybrid approach to optimize for the most accurate forecast

Read time
5 mins
Published on
May 18, 2022

Seasonality was constant, with peaks in March and slumps in August, which enabled manufacturers to predict demand and plan accordingly. 

However, the pandemic broke the cycle and made the future more clouded. Indeed, the automotive industry is at a turning point, and manufacturers need to set strategic plans for the next decade. The old combustion engine is slowly passing the torch to C.A.S.E. (connectivity, autonomous, sharing, electrification), global supply chains are mutating as a consequence of the pandemic and the war, and customers adopting new consumption behaviours. These few factors, among many others, need to be measured, analyzed and incorporated to understand future demand.

As a consequence, manufacturers rely on market forecasters to conduct market research and gather meaningful insights. Market forecasters provide precious analyses to many actors in most sectors. However, regardless of the quality of their information, they may lack a crucial element: personalization. The ability to forecast, not only the market but your own data. 

Each manufacturer is unique and therefore, can benefit from personalized forecasting.

At Indicio, we believe that sound decisions emerge from a hybrid approach: a combination of external market insights and advanced internal statistical analysis. Here is why

Taking a glance at the content published by market forecasters, we anticipate major transformations for the international automotive industry over the next few decades. Steady vehicle sales growth is expected in Asia while European sales may decline. Other sources of growth appear from new trends as customers turn towards car-as-a service (CaAs) and shared mobility, and many other possible scenarios that will evolve with upcoming technologies. 

Is depending on a market forecast sufficient?

Market forecasters build general models based on fictive companies in order to explore the future impacts of these scenarios on revenue. Several characteristics such as market, product, range, target, and segment are chosen to describe a defined type of manufacturer and what it may become. They provide a deep dive into each topic and enable decision-makers to prepare ahead of time. Yet, this is simply standardized research. Each manufacturer is unique and therefore, can benefit from personalized forecasting.

Vehicle sales have evolved throughout the years, affected by countless factors such as regulations, prices, trends, new products, seasonality, competition, growth, recessions, promotions, interest rates. These factors did not affect manufacturers equally, which supports the need for a customized, personalized forecast. 

The value of combining your internal sales data and external market factors

Indicio was built to enable decision-makers to disentangle the relationships between all these factors and their data, in order to produce the most accurate forecasts. By automating the detection of leading indicators and top-shelf model aggregation, Indicio measures the impact of internal and external factors to predict sales accurately at any horizon, in any given situation. 

As forecasting has become increasingly more challenging, we believe that decision-makers should be armed with the best tools available. The synergy between large-scale market forecasting and Indicio’s tailored quantitative predictions can help you prepare and make the best decisions in a fast-changing market. 

Book a quick demo if you would like to detect your market drivers and find out how much you can increase your forecast accuracy.

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