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Purchase Consideration among Consumers for Domestic Brands in China Has Decreased

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Audi, Beijing Hyundai and FAW-Volkswagen Are the Three Most Considered Brands

Shanghai: 29 August 2014 — Purchase consideration among new-vehicle shoppers in China for domestic brands has decreased, most notably in Tier 2 and Tier 3 cities, according to the J.D. Power Asia Pacific 2014 China New-Vehicle Intender StudySM (NVIS) released today.

The study, now in its sixth year, examines the pre-purchase perceptions and purchase considerations of new-vehicle intenders—defined as consumers who plan to purchase a new passenger vehicle within the next 12 months—in 73 cities. The study is designed to provide key consumer insights by examining brand awareness, brand perception, brand and model consideration, purchase consideration and information source, as well as consumer perceptions of various models among new-vehicle intenders. 

The proportion of new-vehicle intenders who indicate they would consider buying a domestic brand has decreased to 16 percent in 2014 from 27 percent in 2013, which is the lowest rate since 2009 when it was 26 percent. The decline is most notable in Tier 2 and Tier 3 cities. In Tier 2 cities, 16 percent of new-vehicle intenders would consider purchasing a domestic model, down from 28 percent in 2013. In Tier 3 cities, the consideration rate for a domestic brand is 20 percent, down from 42 percent in 2013.

European brands are most popular among vehicle intenders at 41 percent, up from 31 percent in 2013, followed by Japanese (19%), U.S. (14%) and Korean (9%) brands.

“Tier 2 and Tier 3 cities are becoming strong automotive markets, with consumers in these cities sharing similar purchase considerations and brand preferences with those in Tier 1 cities more than they have in the past,” said Tony Zhou, director of automotive research at J.D. Power China. “It is vital for domestic manufacturers to improve the overall brand image and brand influences to gain back market share in China.”

Among the most considered brands are Audi, Beijing Hyundai, Buick, FAW-Volkswagen and Shanghai-Volkswagen.

Models with the highest rates of consideration in each vehicle segment are:

  • ŸCompact Mini: smart fortwo
  • Compact: Chevrolet Sail
  • Compact Upper: Hyundai Verna
  • Midsize Basic: Buick Excelle
  • Midsize: Volkswagen Sagitar
  • Midsize Upper: Volkswagen Magotan
  • Compact Luxury: Audi A4L
  • Midsize Luxury: Audi A6L
  • Large Luxury: Audi A8L
  • Compact Luxury SUV: Audi Q3
  • Midsize Luxury SUV: Audi Q5
  • Large Luxury SUV: BMW X5
  • Compact SUV: Buick Encore
  • Midsize SUV: Volkswagen Tiguan
  • Large SUV: Toyota Highlander

Key Findings

  • Across all generations, most vehicle intenders prefer a 4-door sedan with automatic transmission, large space for the driver and smooth driving. In addition, they prefer a vehicle equipped with a GPS navigation system, airbags and a fuel-saving auxiliary system. As for price and after-sale service, the intended vehicle should have a stable price and high maintenance/repair quality.
  • ŸThere are some differences in vehicle preference by age group. Consumers born in the 1960s care more about vehicle safety and performance, whereas those born in the 1970s and 1980s are more concerned with vehicle quality. Younger intenders born after 1990 tend to focus more on the vehicle body type than intenders in other generations.
  • ŸTop consideration reasons among intenders of luxury vehicles are “good vehicle quality,” “good reputation of the brand” and “vehicle safety,” which are the same as the top purchase reasons among those of owners of new luxury vehicles in the J.D. Power Asia Pacific 2014 China Sales Satisfaction Index (SSI) Study.SM Among intenders considering a mass market vehicle, “good vehicle quality” is the leading reason, but when they are enter the purchasing stage, “recommendation by friends/relatives” becomes the leading reason for their purchase decision.  

The study also includes a brand influence score (BIS), which measures familiarity and favorability of automotive brands among new-vehicle intenders in China. BMW achieves a BIS of 664 on a 1,000-point scale, followed by Audi (648), Mercedes-Benz (646), Shanghai Volkswagen (642) and FAW-Volkswagen (639).

The 2014 China New-Vehicle Intender Study is based on responses from 9,727 new-vehicle intenders in 73 cities. They study includes 67 brands and 200 models in 17 vehicle segments. The study was conducted online from May to June 2014.

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