BEIJING – May 17, 2012 – One-third (33%) of Chinese consumers would consider buying a hybrid vehicle if petrol prices were to rise to 10RMB/litre and 28 percent of Chinese consumers would switch to a smaller petrol car, according to a new study by Nielsen, a leading global provider of information and insights into what consumers watch and buy.
Nielsen’s study also finds that consumers in different tiers of cities react differently to petrol price changes. For example, if petrol prices increase to 8.7RMB/litre consumers (65%) in Tier 4 cities (e.g. Chengde, Lianyungang) said they would substantially reduce their vehicle usage, while those in Tier 1 cities (e.g. Beijing, Shanghai) indicated they would not do so until the price increased to 9.6RMB/litre.
“Hybrid cars are emerging as a driving force for auto makers,” said Ganesh Relekar, director, Automotive Research, Nielsen China. “Hybrids had a relatively slow start in the China marketplace, mainly due to limited price subsidies and product offerings, but they are gaining a loyal foothold in a niche marketplace for the luxury car segment. Consumers consider hybrids an attractive buy because of the associated social image and advanced technology.”
Nielsen findings show that typical hybrid owners are male, 35-40 years old, who are initially looking for a luxury brand petrol car or SUV, and switch to a hybrid due to non-availability of inventory. However, owner profiles are changing as younger buyers are increasingly seeking hybrid models. According to Nielsen’s study, these younger buyers have a strong desire for a luxury hybrid car at entry-level prices, which range from 300,000 to 400,000RMB.
“While hybrids are currently a niche, luxury product affordable to consumers in top tier cities, we expect they will increase in popularity as fuel-efficient cars in many areas of the country,” said Relekar.
China’s Luxury Car Buyers
Nielsen has identified China’s luxury car buyer consumer segments:
Brand Enthusiasts, accounting for 27 percent of luxury car sales, aremainly male and 30-39 years old. They have astronger brand preference, prioritizing brand originality and functional performancein their vehicle consideration.
Technology Upgraders aretypically 30-39 years old and male. They see themselves as trend leaders and are most willing to pay for advanced features and technologies in their car choices. Technology upgraders account for 24 percent of luxury car sales.
Business Leaders, making up 18 percent of luxury car sales, are mature and accomplished business owners/executives, aged 35-45 and look for cars that provide social recognition and better comfort.
Value Seekers, account for 18 percent of luxury car sales and aretypically 25 - 35 years old. Value seekers are usually first time luxury car buyers and a high percentage are female. “These consumers wanta car with a luxurious image, but what really drives their decision is how much value it offers, in terms of feature diversity and price competitiveness,” said Relekar.
Image Pursuers are typically30 - 39 years old. These luxury car consumers look for a car that makes a personal statement and enhances their social image. Image pursuers account for 13 percent of China’s luxury car sales.
“China’s auto industry is entering a new phase and as the luxury auto market becomes more sophisticated, auto makers realize that luxury cars buyers are not homogenous,” said Relekar. “Their needs, values and expectations differ, but there’s room for new models to enter the market. It’s critical for auto makers to know and understand the fundamental
differences within their core consumer segments and specifically how to market to them.”
Hybrids Appeal More to Value Seekers, Business Leaders Segments
Nielsen’s study shows that when asked about their intent to purchase a hybrid as their next vehicle, the value seeker and business leader luxury car consumer segments are the most likely to purchase. Thirty-four percent of value seekers say they intend to purchase a hybrid vehicle as their next car purchase, and 28 percent of business leaders intend to do so. Twenty-one percent of brand enthusiasts intend to purchase a hybrid, compared to 23 percent of technology seekers and 19 percent of image pursuers.
“Value seekers and business leaders are high potential consumer segments for hybrid vehicles,” said Relekar. “The economical benefits of hybrid vehicles appeal to value seekers and business leaders see hybrids as opportunities to showcase their social status, as early adopters of the hybrid trend.”
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement,
online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.
Petrol price of 8RMB/litre at time of survey
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