2012 China New-Vehicle Intender Study

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Press Release

• Date Published: 06/29/2012
• Categories: New Vehicle Intender Study

J.D. Power Asia Pacific Reports:
Purchase Consideration for European Models Is Notably Increasing, While Consideration for Japanese Models Is Decreasing

Vehicle Quality and Safety Are Vital to Gain Consumer Consideration

SHANGHAI: 29 June 2012 -- The percentage of consumers in China who intend to purchase a new European vehicle has increased notably to 35 percent in 2012 from 25 percent in 2009, according to the J.D. Power Asia Pacific 2012 China New-Vehicle Intender StudySM (NVIS) released today.

The study, now in its fourth year, examines pre-purchase perceptions and considerations among consumers in China who intend to purchase a new vehicle within the next 12 months. The study is designed to provide key consumer insights by examining brand awareness, purchase consideration, rejection reasons and media usage, as well as consumer perceptions of various models among these new-vehicle intenders. A total of 52 vehicle brands and 171 models in 11 vehicle segments are included in the 2012 study.

The consideration rates of European models, led by German brands, have increased the most among new-vehicle intenders in China. German models have the highest consideration rates in seven of the 11 segments. German models are more popular, particularly in Tier 1 cities in China, compared with models of other European brands, a 32 percent consideration rate among new-vehicle intenders.

The primary reasons for considering a German model include safety features; quality of workmanship; and durability and low failure rate.

The study finds a high correlation between brand consideration rates and actual sales. In the first five months of 2012, sales of German models in China have increased by 221,000 units, representing a 22 percent year-on-year increase, according to LMC Automotive.1

Volkswagen models have the highest consideration rates in the entry mid, mid, upper premium mid and SUV segments, while Audi models are most often considered in the entry luxury, luxury and luxury SUV segments.  

Roewe 550 and FAW Oley B30, both domestic brands in China, have the highest consideration rates in the lower premium mid segment and premium compact segment, respectively.

In contrast, the consideration rate of Japanese models has decreased to 24 percent in 2012 from 32 percent in 2009.

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

• Compact: Chevrolet Spark
• Premium compact: FAW Oley B30
• Entry mid: Volkswagen Polo
• Mid: Volkswagen Lavida
• Lower premium mid: Roewe 550
• Upper premium mid: Volkswagen New Passat
• Entry luxury: Audi A4L
• Luxury: Audi A6L
• SUV: Volkswagen Tiguan
• Luxury SUV: Audi Q5
• MPV: Honda Odyssey

Raising a model's consideration rate has proven to be a fierce battle for automakers and involves significant marketing expenses. Throughout May 2012, there are 287 models2 in China's automotive market vying for consumer attention, while only 2.6 models, on average, are in the consideration set of new-vehicle intenders. The probability of a model being included in an intender's consideration set is approximately 0.9 percent of all the models existing in the market.

Safety and quality are the top criteria among new-vehicle intenders in China. More than three in five (66%) premium segment intenders and 72 percent of non-premium segment intenders consider a model because of its reputation for quality and safety. Quality of workmanship and durability and low failure rate, which relate to quality and safety, are top consideration reasons.

"Understanding what is top of mind with vehicle intenders helps automotive manufacturers focus their marketing messages," said Scott Lu, senior automotive analyst at J.D. Power Asia Pacific, Shanghai. "Manufacturers should focus on the specific consideration cues for a particular segment to better appeal to the target market."

For premium brands, quality and safety; performance and configuration; and brand and image are considered critically important by new-vehicle intenders in the consideration stage. For non-premium brands, quality and safety; performance and configuration; and price are the primary consideration reasons. While manufacturers' promotions are a determining factor in influencing intenders to buy a vehicle, they do not play a significant role in consideration.

Manufacturers of models in each vehicle segment should focus on specific features to effectively target those new-vehicle intenders. For example, price and fuel economy are important features among intenders who are considering small cars. In contrast, intenders who are considering luxury vehicles place importance on brand and image.

"As manufacturers tailor their marketing messages to attract customers to dealerships and dealers are better able to close sales, attention should also focus on eliminating specific concerns of targeted intenders, such as price and fuel consumption," said Dr. Mei Songlin, general manager of research services at J.D. Power Asia Pacific, Shanghai.

The study also finds that the Internet and TV are the most effective channels for connecting with and influencing new-vehicle purchase intenders. In particular, the Internet remains the most influential communication channel. More than two-thirds (69%) of new-vehicle intenders obtain brand information from the Internet, while 58 percent gain information through TV commercials.

The study also measures familiarity and favorability of automotive brands among new-vehicle intenders in China. By examining Brand Influence Scores, the study finds most intenders aspire to own BMW, Mercedes-Benz and Audi. BMW achieves a Brand Influence Score of 705 on a 1,000-point scale, followed by Mercedes-Benz (696) and Audi (664).

The 2012 China New Vehicle Intender Study is based on responses from 5,319 new-vehicle intenders in 59 cities. The study was fielded from February to March 2012.

The New-Vehicle Intender Study is one of eight consumer-based benchmark studies conducted by J.D. Power in China. Other 2012 studies conducted by J.D. Power Asia Pacific include:

• The China Customer Service Index (CSI) Study, which examines customer satisfaction about after-sales service, will be released in end July.
• The China Sales Satisfaction Index (SSI) Study, which measures satisfaction with the new-vehicle sales process, will be released in mid August.
• The China Original Equipment Tire Satisfaction Study, which measures customer satisfaction on original equipment tires, will be released in September.
• The China Initial Quality Study (IQS), which measures problems experienced by new-vehicle owners during the first two to six months of ownership, will be released in late October.
• The China Automotive Performance, Execution and Layout (APEAL) Study, which measures what excites and delights owners about their new-vehicle's performance and design during the first two to six months of ownership, will be released in late November.
• The China Vehicle Dependability Study (VDS), which evaluates overall vehicle dependability during the first 13-36 months of ownership, will be published in mid December.
• The inaugural China Service Loyalty Study (SLS), which measures customer loyalty toward authorized dealerships during the first 13 to 36 months of ownership, will be released in December.

About J.D. Power Asia Pacific
J.D. Power Asia Pacific has offices in Tokyo, Singapore, Beijing, Shanghai and Bangkok that conduct customer satisfaction research and provide performance analytics services in the automotive, information technology and finance industries. Together, the five offices bring the language of customer satisfaction to consumers and businesses in Australia, China, India, Indonesia, Japan, Malaysia, Philippines, Taiwan, Thailand and Vietnam. Information regarding J.D. Power Asia Pacific and its products can be accessed through the Internet at www.jdpower.com. Media e-mail contact: ellen_wang@jdpa.com.

About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
McGraw-Hill announced on September 12, 2011, its intention to separate into two public companies: McGraw-Hill Financial, a leading provider of content and analytics to global financial markets, and McGraw-Hill Education, a leading education company focused on digital learning and education services worldwide. McGraw-Hill Financial's leading brands include Standard & Poor's Ratings Services, S&P Capital IQ, S&P Indices, Platts energy information services and J.D. Power and Associates. With sales of $6.2 billion in 2011, the Corporation has approximately 23,000 employees across more than 280 offices in 40 countries. Additional information is available at http://www.mcgraw-hill.com/.

About LMC Automotive
LMC Automotive, formerly J.D. Power Automotive Forecasting, is the premier supplier of automotive forecasts and intelligence to an extensive client base of automotive manufacturer, component supplier, logistics and distribution companies, as well as financial and government institutions around the world. LMC's global forecasting services encompass automotive sales, production and powertrain expertise, as well as advisory capability. LMC Automotive has offices in the United States, the UK, Germany, China and Thailand and is part of the Oxford, UK-based LMC group, the global leader in economic and business consultancy for the agribusiness sector.  For more information please visit www.lmc-auto.com

Media Relations Contacts:
Ms. Ellen Wang; Public Relation Supervisor; J.D. Power Asia Pacific; Shanghai, 200040 China; +86 21 2208 0831; ellen_wang@jdpa.com

John Tews; Director, Media Relations; J.D. Power and Associates; Troy, Michigan 48098 USA; 001 248 312 4119; john.tews@jdpa.com

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate.