Statistics of Foreign Car Imports into the USA

Abstract

 American consumers take many factors into consideration when choosing a product. One of them being the origin of where a product is made. This case study will observe the statistical number of foreign car imports into the U.S.A during the years of 1969 to 2009. Careful examination will be made of the correlation between the year and the amount of foreign car imports. It will be determined if a precise projection will be possible with the present data.

Key terms: Scatter Plot, Least Square Lines, Linear Relationship, Imports

Is It Made in the U.S.A?

 It is uncertain who first coined the phrase “Made in the USA,” but the American Automotive Industry fully adopted the phrase and turned it into movement. Commercials from car manufacturers promote the idea of buying American made vehicles, and lead people to believe that made in the USA vehicles are superior to imported vehicles. However, that has not always been the case. There was once a time where foreign car imports dominated the US automobile industry due to their reliability and their cost effectiveness. In this study we will analyze data and determine if there was a distinguishable pattern in the number of foreign car imports in relationship to the year sold. (Mend pg. 482)

Scatter Plot

To begin, data will be analyzed using a scatterplot for years 1969-1988. This data shows there is no discernible linear correlation among the year and the amount of foreign cars imported. This scatterplot gives us a unique visualization of the relationship between date and number of imports. There is a clear upward linear line that shows a gradual increase in the amount of cars per year with the occasional dip. (Mend pg. 485)

Relationship between X & Y

Least- Squares

Secondly, another way to analyze the data will be in the form of least-squares to predict the number of imported vehicles. The formula 1.1671 + 0.9087 is inputted into the program to make the proper calculations. The results show that there was a linear correlation between the year and the amount of imported vehicles. Numerical data given from 1969-1988 show an upward trend that exhibits a pattern of growth; clearly displaying a linear correlation. (Mend pg. 486)

Prediction

Thirdly, the program is used to forecast the number of vehicles that are to be imported for the years, 2007, 2008 and 2009 using 95% prediction intervals.  Applying the same formula used in the least-squares for the years 1969-1988, in theory the data would show substantial growth. However, that information is unreliable and there is a chance that those results will prove inaccurate. Many factors must be taken into consideration, and there is no way of knowing if those predictions will actually be valid. Other data models are better suited for these kinds of predictions. (Mend pg. 496)

Real Data

The real results from the 2007-2009 data prove that those previous predictions were inaccurate and confirms that the forecast from 1988-2009 were unreliable. This was largely due to the fact that between 1993 and 1999 there was a decrease in foreign car imports into the U.S.A.  A 40-year prediction proved unreliable due to changing trends in the market. After computing the data between 1969-2009, the results show an affect on the regression line. The standard error grew and there was a decline in the slope because of the length of time being calculated. The changes caused a significant difference in the plots and graphs.  (Mend pg. 489)

Residual Plot

There are better ways to analyze data from 1969-2009 than a scatter plot since it did not precisely display the data. The scatter plot was able to showcase minor changes in the data but enough to give a completely accurate presentation. A residual plot would be a better option because it shows detailed changes in import patterns that are not displayed in a scatterplot. On a residual plot the data flows differently because it is able to overlap to some degree and has greater flexibility in displaying information. (Mend pg. 403)

 In closing, there are a variety of ways to visually analyze statistical data. Different methods may prove better than others in certain situations and different factors should be taken into consideration. The “Made in the USA” slogan isn’t going away anytime soon despite of the large success that foreign imported vehicles are having. American car manufacturers have gained a large percentage of the market share since the 1970’s even with its ups and downs. Furthermore, the market for imported cars has changed significantly since 1969 and we will continue to see changes in trends in the automobile industry as time goes on.

References

• Mendenhall, W., Beaver, R. J., & Beaver, B. M. (2013). Introduction to probability and statistics. Boston, MA: Cengage