The dynamic characteristics of automobile demand are critical for national economic and revenue predictions. Automobile demand and ownership level forecasts are also the basis for travel demand models, land use-transport interaction models, and transport policies and regulations. This article develops a dynamic automobile demand simulation model using a simultaneous-equation system. The system considers the interaction between supply and demand and the resulting equilibrium. The model includes the current and lagged automobile quantity and price variables; economic, financial and operating cost variables; and income and government policy variables. The capabilities of the model are demonstrated through performing a number of simulation experiments considering various growth-development scenarios, changes in operating costs, government policies towards automobile imports, and demographic/employment shifts.