MNI China Auto Purchase Sentiment Survey: Mixed Sentiment Prevails In Chinese Auto Market - Plans To Buy A Car Pick Up In May

Between April and May, consumers were slightly less enthusiastic about the car purchasing environment, but a fall in expected running costs helped keep overall sentiment towards the sector buoyed. Plans to buy a car over the next 12 months picked up, continuing the upwards trend seen since July 2014.

The Car Purchase Indicator rose to 86.7 in May from 86.3 in April, the fourth increase in the past five months. Despite the rise, sentiment has remained below 90 for 12 months in a row, far below the 100 breakeven level. The marginal 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 May, it fell to 123.5 from a four-month high of 125.0 in April, with most consumers still expecting the price of fuel to increase in the coming months. 

The other component that makes up the main Car Purchase Indicator, the Car Purchase Expectations component, fell 0.7% to 96.9 in May, the second consecutive decline and the lowest outturn since December 2014. In the latest month, 58.9% of respondents thought it was neither a good or bad time to buy a car, down from 63.3% in the month before. 11% of respondents thought it was a good or excellent time to buy a car, while 15.4% reported that it was a bad or very bad time.

Car ownership levels dropped slightly over the month to 41.5% in May from 42.4% in April, although remain elevated by historical standards. An increase in car ownership among those earning less than CNY 96,000 per year was not quite enough to offset a drop in ownership among the higher income bracket with the two income groups showing continued convergence.

A supporting factor for car ownership in the future 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 18.6% in May from 14.4% in April, and up from just below 10% in July 2014.

The largest proportion of respondents had a budget to purchase a car in the CNY 100,000 to CNY 140,000 range. There was, however, a jump in those in the over CNY 200,000 range, continuing the trend increase since the summer of 2014.