There was a pullback in consumer perceptions of the purchasing environment for cars in October, while fewer households reported that they currently owned a vehicle, according to the latest MNI China Auto Purchase Sentiment Report.
Consumers noted further discounting by car retailers and tax breaks as a positive, however a deterioration in their own financial situation weighed heavier, resulting in a negative assessment of the conditions for buying a car. In October the Car Purchase Expectations Indicator fell to 97.3 from 101.8 in September, below the 100 neutral level for the first time since May.
The MNI China Car Purchase Indicator, a composite index that takes into account expected running costs as well as buying conditions, was broadly stable thanks to a downward revision to expected gasoline prices. The indicator has had a relatively stable last few months after a stronger Q2, presaging the recent uptick in official passenger car sales. The lukewarm readings since then suggest that the industry may struggle to regain the momentum lost so far in 2015.
Car ownership levels fell to the lowest in nearly two years in October, led by a drop in ownership in respondents in the more densely populated east. The level of car ownership fell to 36.8% in October from 39.9% in September. An increase in planned purchases should limit the decline in car ownership in future though, with plans to buy a car increasing to 17.6%, despite the weakness in sentiment.
In a reversal of recent type, the planned car budget of Chinese families skewed towards the lower ranges in October with the more expensive bands falling out of favour. The largest percentage of responses still went to the mid range of CNY 100,000 – CNY 140,000 though, while the budget tier below commanded the second largest share.
Consumers noted further discounting by car retailers and tax breaks as a positive, however a deterioration in their own financial situation weighed heavier, resulting in a negative assessment of the conditions for buying a car. In October the Car Purchase Expectations Indicator fell to 97.3 from 101.8 in September, below the 100 neutral level for the first time since May.
The MNI China Car Purchase Indicator, a composite index that takes into account expected running costs as well as buying conditions, was broadly stable thanks to a downward revision to expected gasoline prices. The indicator has had a relatively stable last few months after a stronger Q2, presaging the recent uptick in official passenger car sales. The lukewarm readings since then suggest that the industry may struggle to regain the momentum lost so far in 2015.
Car ownership levels fell to the lowest in nearly two years in October, led by a drop in ownership in respondents in the more densely populated east. The level of car ownership fell to 36.8% in October from 39.9% in September. An increase in planned purchases should limit the decline in car ownership in future though, with plans to buy a car increasing to 17.6%, despite the weakness in sentiment.
In a reversal of recent type, the planned car budget of Chinese families skewed towards the lower ranges in October with the more expensive bands falling out of favour. The largest percentage of responses still went to the mid range of CNY 100,000 – CNY 140,000 though, while the budget tier below commanded the second largest share.
