Truck market in US

Case Market sizing McKinsey casing summer internship
Recent activity on Nov 10, 2017
1 Answer
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Anonymous A asked on Nov 09, 2017

any thoughts?

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Anonymous B replied on Nov 10, 2017

Hey there,
Are you talking about revenue or demand for trucks in the US?

Assuming Demand, we can estimate it in the following way:

Our Goal: #trucks sold / year

  1. #trucks = (trucks/person) * (total amount of people)
    • = 1 truck per 100 person (assumption) * 300M people
    • = 3M truck in total
  2. Life-span of trucks are approximately 10 years
  3. #truck / lifespan
    • = 3M/10y = 300K/y (this is your answer if you believe the market is steady)
  4. If you want to integrate a trend:
    • say we have a positive trend in sales because oil prices are dropping globally.
    • Approximately 5% per year, so 5% of the total amount will increase
    • = 300K*5% = 15K
    • Answer of 300K + 15K = 315K
  5. The answer would be: In average 315K trucks will be sold per year in the US.

If you are talking about revenue, assuming the retail price of a truck is about 30K. So revenue generated per year would be $9.45M.

Cheers,
D

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