MNI China Auto Purchase Sentiment Survey: Chinese Car Buying Sentiment Slips- Plans To Buy Fall To Lowest Since September 2014

Consumer confidence towards the car market slipped further again in November. Chinese consumers were slightly more enthusiastic about the car purchasing environment, although a rise in expected running costs dragged overall sentiment down. That said, a slight improvement in car purchase expectations, though still below the neutral 100 level that separates pessimists from optimists, may suggest car sales will help underpin overall market sentiment in the near term.
 
The Car Purchase Expectations Indicator (a gauge of whether consumers believe it is a good time in general to buy a car) increased 1.2% to 98.5 in November from 97.3 in October. This increase was not sufficient to push the Car Purchase Sentiment Indicator (a composite gauge of car buying conditions) higher over the month. On the contrary, the indicator declined to 87.1 in November from 88.5 in October on account of a sharp rise in the Gasoline Price Sentiment which picked up noticeably to 124.3 in November from 120.4 in October.
 
Meanwhile, 38.7% of respondents said they currently owned a car, up from 36.8% in October. There did not appear to be any plans to continue to revise up this figure, with the proportion of consumers planning to buy a car in the next 12 months falling significantly to 12.6% in November from 17.6% previously. Further detail indicates that the drop was driven primarily by a significant reduction in additional purchases with the percentage of consumers planning to buy their first car continuing its upward trend over the month.
 
The largest proportion of respondents had a budget to purchase a car in the CNY 100,000 to CNY140,000 range. The planned car budget of Chinese households tended towards the slightly cheaper option during the month and as a result, there was a significant increase in those in the CNY 80,000 to CNY 90,000 range. Specifically, in November 33.4% of respondents said the budget to buy a car was in this tier, up from 24.5% in October and the highest level recorded since the survey began.
 
Having continued to trend lower since August, the percentage of respondents saying they had a car loan declined to 4.8% in November from 5% in October. Moreover, those with higher income (over CNY 96,000) were more likely to leverage themselves up.     

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