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Nielsen: 78 Percent of Consumers Surveyed in China Plan to Buy a New or Used Car in the Next Two Years

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Sue Feng, sue.feng@nielsen.com, 010-5812-9195

Online Advertising and Information Most Helpful for Buyers; Love of Driving and Social Status Influential Motivators for Car Purchases

Shanghai, China – April 18, 2014 – Seventy-eight percent of consumers surveyed in China plan to buy a new or used car in the next two years, according to a new study by Nielsen, a leading global provider of information and insights into what consumers watch and buy.

According to the global survey result by Nielsen, auto demand in the global market will be strongest in Latin America (75%), Middle East/Africa (75%) and Asia-Pacific (72%), while more than half of North Americans (56%) and half of Europeans (50%) expect to buy a new or used car in the next 24 months.

According to the global survey result by Nielsen, auto demand in the global market will be strongest in Latin America (75%), Middle East/Africa (75%) and Asia-Pacific (72%), while more than half of North Americans (56%) and half of Europeans (50%) expect to buy a new or used car in the next 24 months.

“Linking automotive demand with consumer sentiments and media habits is vital to developing marketing strategies that connect the right Chinese consumers with the right automotive brands,” said Alice Yu, vice president of Automotive Business, Nielsen China. “China, as well as other major developing countries, as expected, represent large areas of growth opportunity for the industry, but capturing this opportunity hinges on marketers successfully identifying, understanding and effectively connecting with buyers’ needs and desires. Online platforms, in particular, present unique opportunities to reach these buyers.

The Nielsen Global Survey of Automotive Demand polled more than 30,000 Internet respondentsi in 60 countries to identify where automotive demand is greatest and to reveal the emotional as well as the financial motives that are most influential in driving new and used car purchase intent. The findings are integrated with an 11-country media consumption study to uncover the media platforms where automotive advertising resonates most strongly and which websites can be most helpful for car-buying consumers.

Purchase Intent Strong in China

New car purchase intent (76%) is still the main theme among Chinese consumers, which puts the country in second place among surveyed countries, only following India (77%). In Europe, on the other hand, more respondents plan to buy a used car (28%) rather than a new car (22%) in the next two years.

“More than 90 percent of the current car owners and 80 percent of the non-car owners expressed the purchase intention for a car in the next two year when they could afford it, indicating a very positive view on the outlook of auto market in China,” said Yu. “Getting to the heart of what drives purchase decisions allows auto marketers to fine-tune their marketing strategies to address the unique needs of the buyers in the markets.”

Emotional Aspirations Trigger Auto Sales

According to Nielsen’s survey, among the car buyer intenders in China, 89 percent of Chinese respondents who currently own a car and 67 percent of those who don’t own a car, say that aside from financial reasons, an emotional love of driving is one of the biggest triggers of automotive sales. Buying a car to reflect a symbol of social status (79% of current car owners vs. 63% of non-car owners) and to fulfill utilitarian needs (71% of current car owners vs. 72% of non-car owners) are other motivators that will spur future automotive demand in China. Meanwhile, 93 percent of current car owners in China regard their cars as a good friend or buddy.

“Automakers are well aware of the power of emotional connections for car buyers, but the key is making sure these messages are clear and resonate through their campaigns to the right audience,” said Ganesh Relekar, vice president of Automotive Research, Nielsen China. “If auto marketers know that consumers are driven by status, then sales efforts centered on the luxury car market should be a priority focus. Similarly, with utility-minded, finance-driven or driver-enthusiast consumers, a keen focus on their desires will ensure that marketing strategies are proactive and aligned with their wants.”

Online Advertising and Content Resonate with Car Buyers

Advertising via online platforms is most helpful to consumers when buying a new car, according to Nielsen’s Media Consumption Survey (2012-2013) across 11 countries.

Sixty percent of Chinese respondents said that automotive advertising via websites is “very helpful” when considering the purchase of a new car, compared with 45 percent who say the same about advertising on TV, followed by 34 percent for magazines and mobile platforms, 27 percent for newspapers and 19 percent for radio ads.

According to Nielsen’s study, the websites considered most informative when making a car purchase are automotive brand websites (77%), professional product review websites (55%), other third-party informational sites (54%) and social media sites (49%). Forty-four percent of the Chinese respondents find dealer websites most helpful, and about one-fourth (27%) say video sites with product demonstrations are most useful.

“Online is developing globally as a space to reach buyers who are actually engaged in marketing content,” said Relekar. “Car buyers also have a propensity toward original equipment manufacturer (OEM)-branded sites, suggesting that marketers should be paying significant attention to the effectiveness of these owned assets.”

Drive Impact on TV by Aligning Creative and Media Approaches

Besides online platforms, TV, thanks to its wide reach, still enjoys advantages over other traditional media as one of the highly preferred platforms for most kinds of ads, including auto. According to Nielsen CCData, TV ad spending for auto products in China increased 18 percent year-on-year in 2013. Separately, Nielsen’s Brand Effect study shows there is still room to improve in terms of the overall performance of auto-themed TV ads.

Despite the high exposure of TV ads, only 30 percent of surveyed Chinese consumers, who had the opportunity to see the ads, were able to recall the TV ads. Among them, only 29 percent could recall the brands, thus the overall ad brand communication result was low at only 9 percent among nearly 60,000 respondents surveyed from April to December in 2013.

“The higher the ad brand communication result score, the better the chance an ad left a memorable impression, which increases the probability that consumers will take action,” said Relekar. “Given the super-cluttered and crowded TV landscape and the rising ad spending on TV, you must know your consumers. You have to understand what they watch, what they buy and how one affects the other. Giving emphasis on creative differentiations, a stronger branding and a wise media investment strategy is becoming more and more important to ensure that your advertising campaign is memorable and achieves a better overall performance.”

About the Nielsen Global Survey
The Nielsen Global Survey of Automotive Demand was conducted between August 14 and September 6, 2013, and polled more than 30,000 online consumers in 60 countries throughout Asia- Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users and is weighted to be representative of Internet consumers. It has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

About the Nielsen Media Consumption Study
The Nielsen Media Consumption Study was conducted in 2012-2013 and polled more than 85,000 consumers in 11 countries using a combined online and offline methodology. The countries in the study include: Australia, Brazil, China, France, Germany, India, Italy, Russia, Spain, Thailand and the United Kingdom.

About Nielsen
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 and mobile measurement. 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.

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i While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration is still growing, audiences may be younger and more affluent than the general population. In addition, survey responses are based on claimed behavior, rather than actual metered data.