Chinese consumers were slightly more enthusiastic about the car purchasing environment in December, driven solely by a noticeable downward revision in fuel price expectations, according to the latest MNI China Auto Purchase Sentiment Report.
The December edition of the survey also revealed that the top brand rankings were little changed compared with last quarter. Volkswagen remained the most popular brand, with 20.6% of responses, although this was down from 25.3% in the third quarter, followed by Honda with a 12.5% share and Buick which took the third place with 11.4% of responses. BYD was the highest ranked domestic brand with a 4.1% share. By type of car, Sedans were again the car of choice with 31.5% of responses while Hatchbacks continued to gain ground with 30.2% of responses compared with 27.9% in the quarter prior.
The Car Purchase Indicator rose to 89.8 in December from 88.3 in November, the highest reading since October 2016. Despite the rise, sentiment has remained below 90 for two consecutive months, far below the 100-breakeven level. The slight gain in the indicator, which is made up of two components, was led by a decrease in consumers’ expectations for fuel costs, as captured by the Price of Gasoline component. In December, it fell to 122.2 from an 11-month high of 125.2 in November, with most consumers still expecting the price of fuel to increase in the coming months.
The other component of the Car Purchase Indicator, Car Purchase Expectations, remained flat at 101.9 in December. In December, 55.4% of respondents thought it was neither a good nor bad time to buy a car, down from 57.2% in the month before. 19.3% of respondents thought it was a good or excellent time to buy a car, while 14.9% reported that it was a bad or very bad time.
Meanwhile, 38.1% of respondents said they currently owned a car, up from 36.2% in November. Ownership levels could further rise given that the proportion of consumers planning to buy a car in the next 12 months improving noticeably to 12.9% in December from 11.5% previously. Having continued to trend lower since July 2016, the percentage of respondents saying they had a car loan declined to 2.5% from 2.8% in November, the lowest level since January 2014.
Of those still planning to buy a car, the planned budget of Chinese families gravitated towards the more expensive brand in December with the cheaper options falling out of favour. The largest percentage of responses went to the second most expensive tier (CNY 150,000 – CNY 190,00) while there was a scale back in the mid-range (CNY 100,000 – CNY 140,000), which commanded the next highest proportion of responses.
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MNI China Auto Purchase Sentiment Report: Chinese Car Buying Sentiment Holds Up In December - Volkswagen Remains Brand Of Choice But Popularity Recedes
Date 11/01/2017
