Asians in the Driving Seat for Future Car Ownership

Price a Universal Consideration

Greatest Market Potential in Asia, with Biggest Pool of First Time Buyers

Toyota the #1 Brand

16 March 2005
Hong Kong

A global online survey on car ownership and purchase intentions conducted recently by ACNielsen reveals that people in Asia are the most ‘aspirational’ when it comes to car ownership in the next 12 months when compared with their American and European counterparts.

Findings on consumers’ current and future car ownership intentions were released today by ACNielsen, a leading provider of consumer and marketplace information, as part of its Online Consumer Survey which polled over 14,100 internet users in 28 countries across Asia Pacific, Europe and the US in October 20041.

Across Asia Pacific, Australia and New Zealand were the only countries in the region making the list of the global top 10 driving nations with 90% of Australians claiming to own a car, on a par with the Italians and just behind Americans at 92%. New Zealanders ranked fourth in the global car ownership stakes, with 89% owning a car. (See Chart 1)

Chart 1: Car ownership - Top 10 ranked countries

At the other end of the scale, nine of the bottom 10 ranked countries for car ownership hailed from Asia, with Hong Kong (20%), China (31%) and Singapore (39%) commanding the lowest percentage of car owners globally. (See Chart 2)

Chart 2: Car ownership - Bottom 10 ranked countries

Based on the survey findings, automotive experts at ACNielsen developed an “Aspiration Index” (AI) to further measure the relationship between current ownership levels and future intentions to purchase a vehicle (See Chart 3), highlighting countries of high future demand. As a result, significant variations were observed between markets and the types of vehicles aspired to, and the factors driving these choices.

Chart 3: Aspiration Index

China, while ranking low in current car ownership, was found to have the most car-aspiring respondents, despite potential car buyers accounting for a small portion of the population.

“Demand in the automotive market in China slowed a bit in 2004, reaching a temporary plateau, but will pick up again in 2005 as China is moving comparatively rapidly from an underdeveloped market with limited brand/model choice to a mature replacement market with an increased competition,” commented Lennart Bengtsson, Chief Marketing Officer, ACNielsen Asia Pacific.

“The desire to own a car in this part of the world corresponds proportionately to the region’s relatively lower ranking in terms of current car ownership,” he added.

With three of the world’s four most populous countries leading ACNielsen’s Aspirations Index, it is clear that consumer demand for their own set of ‘four wheels’ will drive future sales globally, as consumers’ ability to buy a car falls into line with their aspirations.

In contrast, the US, many northern European countries and Japan were all found to have a low Aspiration Index, reflecting higher levels of existing ownership and reduced potential for further growth.

Price driving purchase choice
Globally, price was the most frequently cited driver of choice, and therefore was a universal consideration for new car purchases. Other considerations like fuel consumption, performance and safety were a distant second and third, and varied across the three regions. (See Chart 4)

Chart 4

In Asia Pacific, Malaysians (88%), Indonesians (82%) and Thais (81%) were the most price-conscious while performance figured highly for about two-thirds of Chinese, Indians and Filippinos. When it came to fuel consumption, Indians, Koreans and Singaporeans were relatively more concerned.

“While brand image/prestige did not make it into the top three major criteria for drivers of new car purchases, it ranked higher in the U.S and Spain (28% respectively) and among the European countries and commanded greater importance in a number of Asia Pacific countries like Taiwan, China and Indonesia (40% each),” added Mr. Bengtsson.

”This is an important indicator, suggesting that manufacturers must also focus on brand building to ensure they attract the brand/prestige-minded customers.”

Among those intending to purchase a new car, those in Asia Pacific accounted for the most first time buyers (42%), while over 60 percent of Americans and Europeans were considering a replacement for an existing car.

Toyota the most popular the world over
Among dozens of car brands, Toyota was the most popular the world over, both in terms of current ownership (11%) and consideration for future purchase (16 %). Ford trailed closely at eight percent and Volkswagen was third at six percent in terms of current ownership while Honda (8%) and Hyundai (6%) took over the second and third positions when it came to future purchases among the world’s consumers.

An interesting contrast appeared in the US where Ford ranked number one for share of current ownership (18%) yet Toyota was the first choice for Americans considering a new purchase in the next 12 months (15%).

Sedan remains the most popular car type, for now…
The sedan remains the most popular car type owned on a global basis, with hatchbacks and SUVs placed second and third. Sedans were particularly popular in Taiwan and Thailand, where they accounted for nearly three quarters of vehicles owned.

However, the future is increasingly versatile. Despite sedans remaining the most popular vehicle type for purchase in the next 12 months, SUVs were chosen by 19% of potential buyers in the Asia-Pacific region, compared with 11% of SUVs currently owned. This increase is largely at the expense of hatchbacks (down 7% from owned to intended).

In the United States, intention to buy SUVs was even higher at 36%, compared with 19% of vehicles currently owned, overtaking sedans in the process.

The picture is markedly different in Europe, where high fuel prices and congestion make SUVs less attractive. As a consequence, these vehicles only account for 3% of current vehicles and 5% of intended purchases, whereas station wagons are likely to account for one fifth of future purchases.

1The latest study was conducted across the following markets: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, Vietnam, Austria, Belgium, Denmark, Finland, France, Germany, Germany, Italy, Netherlands, Norway, Portugal, Spain, Sweden, UK, US.

About ACNielsen
ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behaviour. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.

ACNielsen is part of the VNU Marketing Information group. VNU is a global information and media company with leading market positions and recognised brands in marketing information (ACNielsen), media measurement and information (Nielsen Media Research) and business information (Billboard, The Hollywood Reporter, Computing, Intermediair). VNU is active in more than 100 countries, with headquarters in Haarlem, the Netherlands and New York, USA. The company employs 38,000 people. Total revenues amounted to EUR 3.8 billion in 2004. VNU is listed on the Euronext Amsterdam (ASE: VNU) stock exchange. For more information, please visit the VNU website at www.vnu.com.