Consumer confidence towards the car market ended the year on a weak note. There was another pullback in consumer perceptions of the purchasing environment for cars while economic uncertainty lead to increased popularity of smaller, cheaper vehicles. Despite the fall in sentiment, more Chinese households reported that they currently owned a vehicle, according to the latest MNI China Auto Purchase Sentiment Report.
The Car Purchase Indicator – a composite indicator designed to gauge future demand for cars – declined 4.5% to 83.2 in December from 87.1 in November, the lowest reading since April 2012. Note that sentiment has remained below 90 since June 2014, far below the 100 breakeven level. The fall in the Car Purchase Indicator was driven by a decline in the percentage of respondents reporting it was a good or excellent time to buy a car.
Despite the downbeat tone struck towards buying conditions, car ownership levels picked up while consumers grudgingly edged up their plans to buy a car in the future. The ownership rate increased for the second month in a row in December with 42.1% of consumers reporting that their family owned a car, up from 38.7% in November. An increase in car ownership among those earning less than CNY 96,000 per year was enough to offset a slight drop in ownership among the higher income bracket with the two income groups showing continued convergence. A supporting factor for car ownership in the short-term was an uptick in plans for buying a car. The percentage of those planning to buy a car in the next 12 months improved markedly to 18.7% in December from 12.6% in November.
As the dust settles from the Volkswagen emissions scandal, the early signs are that the car maker’s reputation among Chinese consumers remains intact. After gaining 16% of responses as most favoured brand in September, 25% of respondents nominated Volkswagen as their preferred brand in December followed by Buick with 15.5%. Chery was the highest ranked domestic brand with a 2.9% share.
The planned car budget of Chinese families continued to trend towards the middle ranges in December. The largest percentage of responses was again in the mid range of CNY 100,000 – CNY 140,000 while the second most expensive tier, CNY 150,000 – CNY 190,000 commanded the next highest proportion of responses.
The Car Purchase Indicator – a composite indicator designed to gauge future demand for cars – declined 4.5% to 83.2 in December from 87.1 in November, the lowest reading since April 2012. Note that sentiment has remained below 90 since June 2014, far below the 100 breakeven level. The fall in the Car Purchase Indicator was driven by a decline in the percentage of respondents reporting it was a good or excellent time to buy a car.
Despite the downbeat tone struck towards buying conditions, car ownership levels picked up while consumers grudgingly edged up their plans to buy a car in the future. The ownership rate increased for the second month in a row in December with 42.1% of consumers reporting that their family owned a car, up from 38.7% in November. An increase in car ownership among those earning less than CNY 96,000 per year was enough to offset a slight drop in ownership among the higher income bracket with the two income groups showing continued convergence. A supporting factor for car ownership in the short-term was an uptick in plans for buying a car. The percentage of those planning to buy a car in the next 12 months improved markedly to 18.7% in December from 12.6% in November.
As the dust settles from the Volkswagen emissions scandal, the early signs are that the car maker’s reputation among Chinese consumers remains intact. After gaining 16% of responses as most favoured brand in September, 25% of respondents nominated Volkswagen as their preferred brand in December followed by Buick with 15.5%. Chery was the highest ranked domestic brand with a 2.9% share.
The planned car budget of Chinese families continued to trend towards the middle ranges in December. The largest percentage of responses was again in the mid range of CNY 100,000 – CNY 140,000 while the second most expensive tier, CNY 150,000 – CNY 190,000 commanded the next highest proportion of responses.
