Indicative Scenario Planning Projects

Project Descriptions

Part One: Private Sector Projects

Models for Latin American Motor Vehicle Markets. Market planning Latin American is difficult in the best of circumstances. Markets tend to undergo boom and bust cycles and this complicates the job of capital investment and financial planning. For a  major automotive manufacturer, we developed a market estimation model using scenario contingent indicators—GDP, interest rates, unemployment, among others—as the values for the independent variables driving a regression model.  We managed to develop very credible scenario-contingent demand estimates that provided directional insight to the client with respect to ranges of future vehicle volumes under different ‘macro’ assumptions. Additionally, we applied “At Risk” techniques to model the impact—on the baseline scenario-contingent estimates—of specific “shocks” that could occur independent of the scenario. We looked at everything from military coups to vehicle taxes to come up with market estimates and “confidence intervals” for each of four scenarios.

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