MNI China Car Purchase Indicator: Chinese Car Buying Sentiment Steady In October - Car Ownership Levels Lowest Since January 2014

Chinese consumers were slightly more upbeat about the car purchasing environment in October, thanks to a downward revision to expected gasoline prices but were less likely to purchase as plans to buy a car over the next 12 months scaled back notably.

The MNI China Car Purchase Indicator, a composite indicator designed to gauge overall conditions in the car market, rose 1.1% to 90.0 in October from 89.0 in September. The positive tone was supported by a decrease in consumers’ expectations for fuel costs. The Price of Gasoline component fell 2.7% to 121.4 in October from 124.8 in September, with most consumers still expecting the price of fuel to increase in the coming months. 

Offsetting this, the Car Purchase Expectations Indicator (a gauge of whether consumers believe it is a good time in general to buy a car) decreased 1.4% to 101.4 in October from 102.9 in September, the lowest outturn since July 2016, although it remained above the 100 breakeven level for the third straight month. 

Meanwhile, car ownership levels fell to the lowest level in nearly three years in October and came in at 34.6%, compared with 39.2% in September. There did not appear to be any plans to revise up this figure, with the proportion of consumers planning to buy a car in the next 12 months falling to 11% in October from 12.1% previously, the lowest level since July 2014. Further detail indicates that the drop was driven primarily by a significant reduction in those who were planning to buy their first car while the percentage of consumers planning on upgrading or adding to their current vehicle edged up over the month.

Having continued to trend lower since July, the percentage of respondents saying they had a car loan declined to 2.8% in October from 3.3% in September. Finally, the planned car budget of Chinese families skewed towards the middle ranges in October with the more expensive bands falling out of favour. The largest percentage of responses went to the mid-range of CNY 100,000 – CNY 140,000 while the budget tier above commanded the second largest share.