Vehicle Sales Over the Model Year

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Abstract:

Vehicle Sales Over the Model Year

What are the dynamics of the model year? Most vehicles are sold with a refreshment cycle of 4-8 years, shorter for sedans, longer for light trucks. This paper will survey the literature, and then examine monthly model-level data on personal vehicle sales in China. Prices potentially vary across the model year, with early sales focused on high-priced trim levels and at the opposite end, discounting as a model approaches the end of production. This suggests that observed sales will be level over time, corrected for seasonality and COVID shutdowns. I use Chinese data to test that hypothesis empirically, for regular vehicles and also for the now-important subset of New Energy Vehicles (BEVs and PHEVs).