The Hindu Business Line : More Asians want wheels

A GLOBAL online survey on car ownership and purchase intentions conducted recently by ACNielsen reveals that people in Asia are the most `aspirational' when it comes to car ownership in the next 12 months when compared with their American and European counterparts.

These are part of the findings on consumers' current and future car ownership intentions released by market research firm ACNielsen as part of its Online Consumer Survey, which polled over 14,100 Internet users in 28 countries across the Asia Pacific, Europe and the US.

Across the Asia Pacific, Australia and New Zealand were the only countries in the region making the list of the global top 10 driving nations, with 90 per cent of Australians claiming to own a car, on a par with the Italians and just behind Americans at 92 per cent. New Zealanders were ranked fourth in the global car ownership stakes, with 89 per cent owning a car. (See Chart 1)

At the other end of the scale, nine of the bottom 10 ranked countries for car ownership hailed from Asia. It was interesting to note that 60 per cent Internet-savvy Indians owned a car, the highest among other Asian nations. The lowest ownership was in Hong Kong (20 per cent), China (31 per cent) and Singapore (39 per cent). (See Chart 2)

Not surprisingly - given the low penetration of car owners in Asia - the highest proportion of people in Asia (30 per cent) expressed an intention to buy one in the next 12 months. India (44 per cent intending) topped the list with Malaysia (also 44 per cent), closely followed by Indonesia (38 per cent). It was interesting to note the low interest among Chinese (26 per cent intending).

Based on the survey findings, automotive experts at ACNielsen developed an `Aspiration Index' to measure the relationship between current ownership levels and future intentions to purchase a vehicle (See Chart 3), highlighting countries of high future demand.

"The desire to own a car in this part of the world corresponds proportionately to the region's relatively lower ranking in terms of current car ownership," commented Jairaj Jatar, Head, Automotive Industry Practice Group, India.

Yet, the study showed significant variations between markets and the types of vehicles aspired to, and the factors driving these choices.

"Sales have grown strongly in the last 3-4 years in India. But road infrastructure development will decide whether or not pent-up demand will emerge strongly," said Jatar.

"Our study shows that half of the new buyers will be first-time ever buyers - a clear indicator that the evolution of the Indian automobile consumer is happening rapidly. Yet, the proportion of those buying an additional car is also significant. In a market where price is an important factor, this is a signal that affluence is growing parallel to aspiration and therefore bodes well," he pointed out. Nearly one-fifth or 21 per cent of intending buyers claim to be buying an additional car for themselves.

The study also indicates substantial consumer interest in engine size larger than 1.4 litre (80 per cent). It is clear that most Indians aspire to a roomy, family car going forward. Indians can aspire to buy mid-size models as family incomes across urban India continue to grow and household composition increasingly moves towards double-income, nuclear families," added Jatar.

With three of the world's four most populous countries leading ACNielsen's Aspirations Index, it is clear that consumer demand for their own set of `four wheels' augurs well for the automotive industry across the globe, says the survey.

Price drives choice

Globally, price was the most frequently cited driver of choice, and therefore was a universal consideration for new car purchases. Other considerations like fuel consumption, performance and safety were a distant second and third, and varied across the three regions. (See Chart 4)

Malaysians (88 per cent), Indonesians (82 per cent) and Thais (81 per cent) were the most price-conscious. Indians and Chinese seemed equally conscious of price (75 per cent, 65 per cent) as well as performance (65 per cent, 67 per cent). On fuel consumption, Indians were the most conscious (54 per cent) across the Asian region. In the rest of the Asia Pacific, Chinese (37 per cent) were relatively less concerned while Koreans and Singaporeans were relatively more concerned.

"Brand image/ prestige was an important dimension for only 23 per cent of Indians. The response was similar to most other Asians. This is an important indicator of the market maturity and could be related to greater customer emphasis on price, expense and value dimensions," said Jatar.

"Another similarity we share with most other Asians is the relative disinterest in ease and comfort of driving. This information provides marketers with clear cues not only in terms of product design but also communication and positioning platforms," added Jatar.

Toyota world over, Hyundai for India

Among dozens of car brands, Toyota was the most popular the world over, in terms of consideration for future purchase (16 per cent). Ford trailed closely at eight per cent and Volkswagen was third at six per cent in terms of current ownership while Honda (8 per cent) and Hyundai (6 per cent) took over the second and third positions when it came to future purchases among the world's consumers.

In India, Hyundai appears to have attracted more Intemet-savvy Indians than any of the other brands with 24 per cent of them indicating that their future purchase is most likely to be from the company's portfolio.

Sedan, the most popular

The sedan remains the most popular car type owned on a global basis, with hatchbacks and SUVs placed second and third. Sedans were particularly popular in Taiwan and Thailand where they accounted for nearly three-quarters of vehicles owned.

The future consumer has increasingly versatile needs. Despite sedans remaining the most popular vehicle type for purchase in the next 12 months, SUVs were chosen by 19 per cent of potential buyers in the Asia-Pacific region, compared with 11 per cent of SUVs currently owned. This increase is largely at the expense of hatchbacks (down 7 per cent from owned to intended). In India, SUVs appear to be ready to overtake hatchbacks. A comparatively higher proportion (17 per cent) intend to purchase an SUV/ four-wheel drive compared to a hatchback (10 per cent) within the next 12 months. "One has to keep in mind that Internet-savvy Indians typically tend to be more affluent and open to the early adoption to new products. This has a bearing on their choice of product as well. SUVs are a bolder, multi-utility vehicle that can also be a lifestyle statement," observed Jatar

The picture is markedly different in Europe, where high fuel prices and congestion make SUVs less attractive. As a consequence, these vehicles only account for 3 per cent of current vehicles and 5 per cent of intended purchases, whereas station wagons are likely to account for one-fifth of future purchases.

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