Press Room

RISING MIDDLE CLASS WILL DRIVE AUTOMOTIVE DEMAND IN THE COMING TWO YEARS

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  • Indonesian car owners show a strong will to upgrade their vehicle – the highest upgrade intention level globally
  • Southeast Asian consumers’ intention to acquire a car is among highest levels globally

JAKARTA, 16 APRIL 2014 – Although car ownership in Indonesia is among the lowest levels globally, consumers in the country are displaying very strong intention to purchase a new car in the coming two years, according to a report released today by Nielsen, a global information and measurement company.

The Nielsen Global Survey of Automotive Demand found car ownership was relatively low across much of Southeast Asia; 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 posted the third highest level of car ownership globally (93%) and the highest incidence of multiple car ownership globally (54% of households have more than one car).

Despite the overall low ownership levels, Indonesia records the highest purchase intent, which together with 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.

“Automotive demand in Indonesia has been increasing in the past two years, with last year’s car sales hit 1.2 million record” notes Anil Antony, Executive Director of Consumer Insights, Nielsen Indonesia. “We have seen similar pattern across the region, largely due to rising income levels 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 Malaysia, 89 percent in Thailand, and 87 percent in Singapore, compared to a global average of 89 percent.

In terms of how they view their cars, many Indonesian 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 (88% view 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 three Southeast Asia markets ranked in the top 10 countries globally when it came to viewing their car as a status symbol. Thai car owners ranked second highest globally in viewing their car as a status symbol (79%) along with 72 percent of Filipino car owners (fifth highest globally), 67 percent in Indonesia (10th highest globally), 62 percent in Malaysia and 54 percent in Singapore. This compared to 52 percent of consumers globally.

For non-car owners, Indonesian online consumers believe that owning a car is very important. Indonesians are uniquely different from others with 93% saying that not having a car is embarrassing for them. It is way above other markets which are all below 50 percent. Only 33 percent Malaysians say that not having a car is embarrassing for them, followed by Singapore (22%), Philippines and Thailand (21%).

“Indonesian consumers, and particularly 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.” Anil concluded.

Contact

Miladinne Lubis, +62 855 108 2304, [email protected]