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60% Net-savvy Indians own a car!

By A Correspondent in Mumbai
May 05, 2005 06:39 IST
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Has the Internet anything to do with car sales? In India it would seem so.

A global online survey on car ownership and purchase intentions, conducted recently by ACNielsen, reveals that 60% Internet-savvy Indians owned a car, the highest among other Asian nations.

And the most popular car brand amongst India's online community is Hyundai.

Significantly, mirroring the high cost of automobile fuel in the country, Indians were the most conscious (54%) of fuel consumption, across the Asian region, while brand image and prestige was not so important.

Indian and Malaysians, at 44 per cent each, are the most expected to buy cars across Asia over the next 12 months the survey has shown. Significantly, Asia is the most 'aspirational' when it comes to car ownership in the next 12 months when compared with their American and European counterparts.

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.

Malaysians (88%), Indonesians (82%) and Thais (81%) were the most price-conscious. Indians and Chinese seemed equally conscious of price (75%, 65%) as well as performance (65%, 67%). In the rest of Asia Pacific, Chinese (37%) were relatively less concerned while Koreans and Singaporeans were relatively more concerned.

Brand image/ prestige was an important dimension for only 23% of Indians. The response was similar to most other Asians. This is an important indicator of the market maturity and could be related to greater customer emphasis on price, expense and value dimensions.

ACNielsen, a provider of consumer and marketplace information, conducted this survey as part of its Online Consumer Survey, which polled over 14,100 Internet users in 28 countries across Asia Pacific, Europe and the United States.

"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," the study quotes Jairaj Jatar, Head, Automotive Industry Practice Group, India, as saying.

Yet, the study shows significant variations between markets and the types of vehicles aspired to, and the factors driving these choices.

"Sales have grown strongly in the last 3-4 years in India. But, road infrastructure development will decide whether or not pent-up demand will emerge strongly" Jatar says.

"Our study shows that half of the new buyers will be first time ever buyers -- a clear indicator that the evolution of the Indian automobile consumer is happening rapidly. Yet, the proportion of those buying an additional car is also significant. In a market where price is an important factor, this is a signal that affluence is growing parallel to aspiration and therefore bodes well," points out Jatar.

Nearly one-fifth or 21% of intending buyers claim to be buying an additional car for themselves.

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 were ranked fourth in the global car ownership stakes, with 89% owning a car.

At the other end of the scale, nine of the bottom 10 ranked countries for car ownership hailed from Asia. The lowest ownership was in Hong Kong (20%), China (31%) and Singapore (39%).

Not surprisingly -- given the low penetration of car owners in Asia, the highest proportion of people in Asia (30%) expressed an intention to buy one in the next 12 months. It was interesting to note the low interest among Chinese (26% intending).

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, highlighting countries of high future demand.

The study also indicates substantial consumer interest in engine size larger than 1.4 litre (80%).

It is clear that most Indians aspire to a roomy, family car going forward. Indians can aspire to buy mid-size models as family incomes across urban India continue to grow and household composition increasingly moves towards double-income, nuclear families," adds Jatar.

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' augurs well for the automotive industry across the globe.

"Another similarity we share with most other Asians is the relative disinterest in ease and comfort of driving. This information provides marketers with clear cues not only in terms of product design but also communication and positioning platforms," adds Jatar.

Toyota the most popular the world over, but in India it's Hyundai. Among dozens of car brands, Toyota was the most popular the world over, in terms of 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.

In India, Hyundai appears to have attracted more Internet-savvy Indians than any of the other brands with 24% of them indicating that their future purchase is most likely to be from the company's portfolio.

Sedans most popular

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.

The future consumer has increasingly versatile needs. 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 India, SUVs appear to be ready to overtake hatchbacks. A comparatively higher proportion (17%) intend to purchase an SUV / 4-wheel drive compared to a hatchback (10%) within the next 12 months.

"One has to keep in mind that Internet-savvy Indians typically tend to be more affluent and open to the early adoption to new products. This has a bearing on their choice of product as well. SUVs are a bolder, multi-utility vehicle that can also be a lifestyle statement," observes Jatar.

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.
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