Automotive Research News

US registrations for new hybrid vehicles rose 81% to 83,153 in 2004, according to R. L. Polk & Co, with the Toyota Prius (64%) and Honda Civic (31%) still getting the lion's share. Meanwhile research from ACNielsen shows China's automotive market on a plateau, despite rising private car sales.

Two automotive items for today - and watch out for a major feature interview next week with recently acquired J.D. Power & Associates.

Hybrid Growth Continues

In the US, the Toyota Prius recorded 53,761 new hybrid vehicle registrations in 2004, a 33% increase over 2003. The Prius has a sizeable lead over the Honda Civic, which had 25,586 registrations. Since the introduction of hybrid vehicles in 2000, the market has grown by more than 960 percent.

California is way out in front of all other states in new hybrid vehicle registrations: there were 25,021 in 2004, more than four times the figure for second placed Virginia (5,613).

Lonnie Miller, Polk's Director of Analytical Solutions, says expectations of continuing high gas prices and the introduction of new consumer models have heightened interest in hybrid vehicles. 'Hybrids offer improved fuel efficiency and lower emissions while maintaining the functionality and convenience of gasoline-powered vehicles. Hybrid technology is also easy to produce and works within the existing transportation infrastructure'.

Hybrid vehicles are automobiles powered by internal combustion engines, but are also equipped with batteries recharged during driving and an electric motor to assist with power demand. Choice continues to expand, with several new hybrid models introduced in the past few months including the Dodge Ram, Lexus RX 400h and the Mercury Mariner. Major manufacturers are planning a total of almost a dozen new hybrid vehicles in the next three years.

R. L. Polk & Co.is based in Southfield, Mich. with operations in Australia, Brazil, Canada, China, France, Germany, Italy, Japan, Mexico, the Netherlands, Spain, the UK and the US, and is online at www.polk.com

... While Chinese Market Stalls

ACNielsen's research suggests that the passenger car sector is showing signs of growth while China's automotive market in general has reached a plateau and is not expected to pick up within 2005. Nielsen interviewed more than 2,500 consumers in Beijing, Shanghai and Guangzhou using CATI.

'Prospects for the auto market are not expected to improve in 2005, but we see potential for growth in the passenger car sector, with an increase in both the percentage of households owning a car, and those with plans in the near future to purchase one in China's three key cities', said Philippe Coquelle, Director of Automotive Research.

As supply exceeds demand in the current auto market and the price of domestic automobiles continues to decline, potential buyers have cut their budget from RMB 165,000 to RMB 135,000 from the previous year, down 18 points. Shanghai's potential buyers have the highest budget - RMB 150,000 vs 145,000 for Guangzhou and RMB 120,000 for Beijing.

Beijing continued to out-perform the other cities with car penetration climbing to 22%, up 11 points from the previous year. Guangzhou followed with 14% penetration, a 9-point increase. Shanghai ranked third with 8% of respondents claiming to own a car, up 4 points from 2004.

Over 70% of potential buyers claimed they would pay cash, and only 12% said they would use a bank loan. Current owners are hanging on to what they have: only 20% say they are considering replacement within five years. 'Chinese private buyers are not yet used to paying for durable goods on credit' says Coquelle. 'In addition, buyers are discouraged by the complicated application process for car loans'.

Although market slowdown continues, the private passenger car sector shows sign of growth, as penetration among private owners increased from 7% to 15% in 2005. 'As consumers' income levels increase and companies provide less transportation for their employees, the private segment is increasing and forms a major engine of growth for the automotive market,' said Coquelle. 'Manufacturers should pay more attention to potential private car buyers and align their marketing strategy with this group of consumers' needs, to weather the storm of an overall downturn in the auto market'.

Chinese buyers have an increasingly complex set of requirements. 'Value for Money' remains one of the main considerations but its importance halved from 36% to 18%, while the importance of 'Brand' also dropped from 17% to 10%. Vehicle performance (11%), safety (10%), and exterior design (9%) play an increasingly important role in the purchase decision. 24% of potential buyers look for information on the web, up eight points from 2004, with traditional media (27%), friends & relatives (21%), and advertising (14%) the other important sources. Dealers as yet do not have a very important role compared with other developed countries.

ACNielsen is on the web at www.acnielsen.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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