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Car makers in China have cause for optimism in 2009

16 April, 2009

SHANGHAI — While consumers in China remain cautious in deciding about a car purchase, growing optimism among Chinese auto buyers may indicate a continuing recovery of the passenger vehicle market. This is one of the principal outcomes of a recent TNS China Automotive survey of 1,026 mainland car purchase intenders, in run up to the 13th Shanghai International Automobile Industry Exhibition.

Almost half of consumers intending to buy a car (45 percent) have postponed their purchase in the first quarter of the year, due to concerns about the economic slowdown. Only one out of every three soon-to-be car buyers (32 percent) is considering postponing their purchase when assessing their plans for the next three months. Encouragingly in parallel, nearly four out of ten purchase intenders (38 percent) are set to proceed with their purchase plans.

Optimism is shown mainly by car buyers over 30, of whom not more than 25 percent plan to postpone their purchase decision with almost half (46 percent) intending to pursue their purchase as initially planned. “Car buyers above 30 years old constitute the core consumer group for automotive purchases”, says Klaus Paur, Shanghai-based TNS Automotive Director for North Asia. “Most of them have already progressed in their career, and can allocate a decent amount of money for a car purchase. A positive look at the future from this group of consumers is certainly good news for car makers in China.”

Growing optimism is accompanied by increasing budget consciousness, however, with one in every four future car buyers (23 percent) intending to scale down their purchase budget. The vast majority of purchase intenders (76 percent) declare being influenced by the government’s new purchase tax policy; i.e., the reduction of purchase tax to 5 percent for cars with engine displacements of 1.6 litres or smaller. “After three months, we can see the benefit of the purchase tax reduction”, comments Paur. “It directly serves those who are confident enough to buy now. But it is also assimilated into the purchase decision making process of those still hesitating, and may help to bring forward the decisions themselves. In this sense, it can help to create confidence.”

The survey also contains some particularly good news for Chinese car manufacturers. In overall terms, the economic downturn helps them to become more interesting to consumers in the mainland. Four out of every ten future car buyers (44 percent) who mainly consider international brands for their car purchase are open to switching to Chinese domestic brands in response to the current economic situation. Likewise, 60 percent of purchase intenders considering both international and Chinese brands now show an increased preference for Chinese makes. “The economic slowdown offers real opportunities for Chinese domestic car makers”, Paur concludes. “They can benefit from the cautious consumer behaviour and position themselves as attractive alternatives to foreign brands – if they deliver sufficiently well on consumer expectations regarding product quality and reliability!”

About this study
TNS Automotive China conducted this syndicated study of car consumer confidence in early April 2009 to deliver expert industry data and insights about Chinese car buyers’ attitudes and behaviours in the economic downturn. The car consumer confidence survey is based on 1,026 online interviews among potential car buyers in eight cities across mainland China.

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About TNS
TNS, who recently merged with Research International, is the world’s largest custom research agency delivering actionable insights and research-based business advice to its clients so they can make more effective business decisions. TNS offers comprehensive industry knowledge within the Consumer, Technology, Finance, Automotive and Political & Social sectors, supported by a unique product offering that stretches across the entire range of marketing and business issues, specialising in product development & innovation, brand & communication, stakeholder management, retail & shopper, and qualitative research. Delivering best-in-class service across more than 70 countries, TNS is part of Kantar, the world’s largest research, insight and consultancy network.

About TNS China
In business since 1992, TNS is one of the first international market research agencies to start operations in China. In recent years, TNS has grown substantially and established itself as one of the most successful and reputed market research and consulting agencies in China, with over 150 professional researchers and more than 300 employees in three full service offices in Beijing, Shanghai, and Guangzhou. TNS China focuses on the Automotive, Consumer, Finance, Healthcare and Technology sectors.  

About TNS Automotive
TNS Automotive is the leading global provider of automotive market information and insights, with a specialist network of over 350 experienced and dedicated researchers worldwide.
Living and breathing automotive, our experts address the complex research needs of clients including major global automotive and tyre manufacturers, component suppliers, oil companies, repair specialists, parts distributors, dealerships and advertising agencies. Whether our clients are developing new products, optimising advertising and media expenditures, defining new market segments or consolidating their position in the marketplace, our complete portfolio of expert customised and syndicated automotive research solutions delivers added value.
We help our clients drive better business with innovative insights.

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