RISING MIDDLE CLASS WILL DRIVE GLOBAL AUTOMOTIVE DEMAND IN THE COMING TWO YEARS
Although car ownership in the majority of Southeast Asian markets is among the lowest levels globally, a new global report from Nielsen reveals consumers throughout the region are displaying strong intention to purchase a new car and will drive much of the world’s automotive demand in the coming two years.
As many as 47 percent of Filipino households do not own a car (fifth lowest globally) and 46 percent of Indonesian households have no car (sixth lowest globally). Conversely, Malaysia boasts the third highest level of car ownership globally (93%) and the highest incidence of multiple car ownership globally – 54% of Malaysian households have more than one car.
Despite the overall low ownership levels across the region, purchase intent is high with Indonesia, Philippines and Thailand all ranking in the top 10 countries globally for intention to acquire a car within the next two years. Around four in five Indonesian and Thai consumers (81% and 79% respectively) intend to acquire a car within the next two years, as do three quarters of Filipinos (76%), compared to just 65 percent globally.
Historically automotive demand in Southeast Asia has been relatively low and for many households owning a car has been financially out of reach. Those tables have turned in a big way in recent years, however, largely due to rising income levels across the region as more and more households join the middle class and attain the financial means to make their first car purchase.
Among current car owners in Southeast Asia, intention to upgrade is also high, particularly in the Philippines (highest level of intention to upgrade globally), and Indonesia (fourth highest level of intention to upgrade globally). More than nine in 10 Filipino car owners (96%) intend to upgrade their vehicle when they are financially able, as do 95 percent of car owners in Indonesia, 93 percent in Malaysian, 89 percent in Thailand, and 87 percent in Singapore, compared to a global average of 89 percent.
Many Southeast Asian car owners believe the primary role of the car they drive is to get them where they need to go. Singaporeans are most pragmatic about their vehicles, with close to nine in 10 (88%) viewing their car as a tool to get them where they are going, followed by Filipinos (87%), Indonesians and Malaysians (85%) and Thais (82%).
Many Southeast Asian car owners also believe their car is an important symbol of the success they have achieved in life, and four Southeast Asia markets rank in the top 10 countries globally when it comes to viewing their car as a status symbol. Almost eight in 10 Thai car owners (79%) view their car as a status symbol, along with 72 percent of Filipino car owners, 67 percent in Indonesia, 62 percent in Malaysia and 54 percent in Singapore.
Southeast Asian consumers, and particularly the emerging middle class consumers, are highly aspirational. As their income levels rise, these consumers are not only in a better position to buy the things they want and need, they are also looking to make purchases which demonstrate their rising social status. For many of these consumers, car ownership is the ultimate symbol of how far they have come and the success they have achieved.
Insights contained in this article are taken from The Nielsen Global Survey of Automotive Demand which was conducted between August 14 and September 6, 2013, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. Click ‘download’ to obtain the complete report now or for more information contact Nielsen.