Americans are not ready to buy Indian or Chinese cars
According to this report from India’s Economic Times, American consumers are not entirely ready for an influx of low cost motors from China or India, although it appears that the younger generations are interested in buying a Chinese car with 52% of those surveyed indicating they wish to hop behind the wheel of a Chinese car, whilst 41% said they were interested in an Indian car. Baby Boomers were not taken with the idea of buying any car from a developing nation apparently:
A wave of new Indian and Chinese automobiles are poised to make their debut in the US market in coming months, but a new study has found that most Americans are not open to the idea of buying a car from companies like Tata, Mahindra and BYD.
Market research firm GfK Automotive’s Barometer of Automotive Awareness and Imagery Study found that Chinese and Indian auto-makers could face a similar purchase consideration curve to Korean vehicles when they launched in the US.
In that case, it took more than 15 years for consumers to significantly increase their consideration to purchase Korean vehicles.
The majority of American consumers are not open to buying a car from a Chinese or Indian manufacturer. Such auto-makers looking to break into the US market face challenges in brand awareness and acceptance, said the study.
The Barometer of Automotive Awareness and Imagery Study found that only 38 per cent of the respondents would consider buying a Chinese car and 30 per cent an Indian vehicle.
In contrast, 95 per cent are open to buying from an American company, 76 per cent from a German manufacturer, 75 per cent a Japanese vehicle and 49 per cent a Korean model.
Gen Y consumers were the most open to buying Chinese or Indian vehicles, with 52 per cent saying they’d consider a car from China and 41 per cent open to a car from India.
Predictably, Baby Boomers were the least interested. Supporting its report, GfK cited the challenge Hyundai initially had gaining market acceptance in America, stating that “Chinese and Indian automakers could face a similar purchase consideration curve”.
“However, we would add that the quality, performance, safety and reliability of the models make all the difference. And Hyundai initially trailed in all those regards. Perception took years to change, because the company itself took over 15 years to offer competitive products,” it said.Companies such as BYD (China), Chery (China) and Mahindra (India) have in recent years declared their intent to launch products in the United States, only to repeatedly delay their introduction.
“Clearly, the time will come when cars arrive on our shores directly from such manufacturers. For some, arguably, the time is now, as the current parent company for Land Rover and Jaguar, Tata, is an India-based corporation. And Volvo is owned by China-based Geely,” GfK Automotive said in its report.
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I’m surprised with those numbers. I’d be very curious on the demographics of the people they surveyed. 52% want to drive a Chinese car? or 52% “would” if they had no options? The numbers are deceiving.
The used automobile market is way more mature in western countries, and I would imagine youth would be much more interested in a lower price point used vehicle from a trusted name than a new Chinese vehicle.
What they never reveal is the no of people surveyed and their racial/social status, it could be 20 second/third generation ethnically Chinese, or 50 white college students, you are going to get mixed results with each social segment you target, of course you can play this to your advantage for the sake of reporting.
You hit the nail on the head with the second hand car market, Proton have always scrapped the bottom of the barrel in the British car market as there was always the choice between a new Proton XXX or a two year old BMW 3-series. At the end of the day, as an enthusiast, what would you buy?
I haven’t driven a Proton before but I bet they come without the attitude. BMW drivers need to realize it is just a car and doesn’t make you a different person.
Most people know very little about thier cars. Ask someone how many liter is thier car engine, most would say 4 cylinders. With years of confusion in the band and sub brands (GM=Chavy,Buick….,Honda= honda,acura..) most drivers has no clue as to the location where thier car was design or buit. All this bring me to a conclusion that same as I pad is made by Apple in ShanZhan China, no one will realy care, in the long run that thier car will be made in a south indian villege by Tata, or at Nanjing by SIAC.
@ MannyZ
> Most people know very little about thier cars.
That maybe true in China, but not in the US and Europe.
A brand new car represents a significant investment for the buyer regardless of model, and buyers do their research before making the decision.
bullshit do they i know girls and guys here in the UK who know fuck all about cars all they know is you put fuel in and you drive it its people who care about cars know how they run who will actually put in effort to know how they work not just because there in the western part of the world wow you ignorant for someone who supposedly lives in a free country lmfa,
only if you are someone who actually knows the automotive industry then yeah you will want to/know the facts and figures of specific cars and before you go ranting on about me not knowing im a automotive engineer so there goes your argument
I find the comments about Korean cars interesting….the article fails to mention that when Hyundai (the first of the Korean companies to sell cars in America) first sold the Excel in 1985/1986, it was a BIG sales success – it was the reliability issues 3-4 years later which hurt the company’s reputation for the next 10 years or so.
In many ways, today’s economic atmosphere in America is similar to the early 1970′s (when the Japanese companies first started to have sales success) – lots of instability, unemployment and uncertainty about the future. People are yearning for a good bargain right now – the Honda Civic (which was the good bargain people flocked to in the 1970′s) is now $20,000 or more……even Honda’s price leader (the Fit) is $12,500. For a Chinese/Indian company to be successful in America, they’ll need to make a statement – it needs to be economical, reliable, low cost but decently appointed. Having a GPS/DVD screen isn’t that important (most people have GPS on their phones anyway), but ABS/airbags/AC and a decent sound system is. Many American consumers will be perfectly happy with a car that will save them some money every time they fill up at the gas station, let them cruise in decent comfort and not be worried about being stuck on the side of the road all the time. With these “modest” requirements in mind, I DO think there are cars made in China and India that can do the job – and sorry, BYD isn’t the company I’m thinking of (even though they’ll most likely be the first). Any choices out there? Any cars YOU might think of that can “cut the mustard” in the American market?
@ joninchina
In the US, Hyundai Accent(Excel’s successor) has been declared the People’s Car by LA Times a week ago. http://articles.latimes.com/2011/aug/18/business/la-fi-autos-hyundai-accent-review-20110818-1
So you know the benchmark for Chinese car is the Accent. Chinese must deliver better quality with a longer warranty(Since Accent has a 10 year warranty, how about a 12 year warranty?) and lower price; in other word, an impossibility because Hyundai doesn’t seek to profit from Accent; rather the Accent is used to lure young drivers into Hyundai brand, similar to Toyota’s Scion.
I would definitely like to know who they surveyed, because nobody contacted me. This is why I don’t trust these random surveys, and that’s exactly what it is: a specific target of people GFK feels represent the average American buyer. They need to survey everybody or at least 75-80% of the car-buying public to make it credible.
Joninchina in hitting the nail squarely on the head in his response. Essentially every Korean and Japanese company that sell cars in the US today ran into some difficulty from the start. With the execption of Daihatsu, Isuzu and Daewoo, all these companies are still here , with varying degrees of success. I don’t think the Chinese and Indians will suffer much as long as they offer a dependable, affordable, well-built product.
The only company I see having a hard time in the US is Mahindra. Thanks to that fiasco with Global
Vehicles USA, Mahindra will have to move heaven and earth to fix its damaged reputation.
I think you’re wrong.
Chinese are notorious for pumping out shitty products. Japan has major manufacturers of well respected brands that infiltrated society in a major way — “walkman”?!? Those brands made it easier to accept cars from Japan, and to a lesser extent Korea…. but China is notoriously pushing out shitty manufacturing and safety standards in every industry. If you think that wont influence how their cars are received, I’d wager you’ve a vested interest or are a little self-deluded and are looking for justification
I’m not saying they’ll never be accepted as a norm, I’m saying it will be a much larger hurdle and will be a much longer acceptance time than Japanese (lesser extent: Korean) brands.
Rick you are right. China has more of a hurdle than Japan or Korea for sure. Those countries did not have scandal after scandal of bad products. Partly to blame that now everyone has internet and the media loves to broadcast any problem they can find and make a big deal out of it. Look how big a deal it was that President Clinton had an affair. Go back years before that and it would have never made the news anywhere. China is known for making bad products because of all of this and that is a huge hurdle. Any problems with their cars is going to crush their sales. So pushing anything to market too early is going to destroy any small amount of credibility there is. But if done right with serious effort and someone could pull it off. The problem is no Chinese car company has shown that they are to that point yet. Not for a whole line of cars that could be sold over seas in an established market.
But if done right with serious effort and someone could pull it off
So you’re saying that Australia and South Africa are not considered as proof? Come on.
And no, I’m not dellusional or have a vested interest in anything.
Did you miss the line after that?
The problem is no Chinese car company has shown that they are to that point yet.
Proof of what?
@ Dmoore
> But if done right with serious effort and someone could pull it off
And there is no one to pull it off and overcome the baggage of “China” brand.
> So you’re saying that Australia and South Africa are not considered as proof? Come on.
Chinese cars are failures in Australia and South Africa is a 3rd world country.
@ Dmoore
> I don’t think the Chinese and Indians will suffer much as long as they offer a dependable, affordable, well-built product.
Indians, no.
Chinese, yes. Why? It’s the “China” brand that’s haunting Chinese automakers. Chinese people do not seem to understand the extreme negativity associated with “China” brand.
> Thanks to that fiasco with Global
Vehicles USA, Mahindra will have to move heaven and earth to fix its damaged reputation.
Global Vehicles USA fiasco is not known to general public and does not affect Mahindra brand.
In addition, Mahindra’s US market vehicles will come from Korea(Ssangyong), not India.
It’s the “China” brand that’s haunting Chinese automakers. Chinese people do not seem to understand the extreme negativity associated with “China” brand.
Not all Chinese people. there are many who are trying to distance themselves from the negativity.
As for Global VEhicles USA, They are very well known to the general American public, and especially those who follow the auto industry closely. They also know it by its origianl name, Crosslander USA and the scandal that erupted following the soured deal with ARO andthe Romanian government in 2004.
And I have it on good authority that Mahindra will not be shipping Ssangyong-built products to the US anytime soon.
This is what it takes for a Chinese car to come to America.
1. A loaded price of $9999 or under.
2. 12 year/120K miles warranty(That’s 192,000 km to you)
3. 5 star crash test performance.
4. Initial investment of $1 billion to build a network of 500 dealers.
Now how many Chinese automakers can meet above requirements? None. Fortunately, Chinese automakers are blessed with the largest auto market in the world, the Chinese domestic market, and has no real need to come to America, unlike Japan and Korea whose production capacity is 5 times the volume of their annual domestic market and must unload 80% of output somewhere.
So Chinese automakers should forget about coming to the US or Europe and solely focus on retaking Chinese domestic market control from foreigners instead.