Global Consumers Look for Different Things in Buying New Cars

PARIS – Americans, like people in most other major markets, say that price, efficiency and security are the top three concerns they have when they buy a new car.

But after the headlines showing similarities, other data in a recent research study indicate American buyers have some significant differences.

The Observatoire Cetelem, a research unit of the French bank BNP Paribas, interviewed at least 500 car buyers in each of 14 countries this year as part of an analysis of the global automotive market. Among other global operations, BNP Paribas owns the Bank of the West in the U.S. and its automotive finance unit, and the bank is preparing to establish an in-house credit arm for Geely in China.

The 14 countries represent 70% of global automotive consumption, says Flavien Neuly, who runs the Observatoire Cetelem.

On average, 64% of car buyers put price as the No.1 factor in selecting a new vehicle, followed by fuel efficiency (52%) and safety (46%). American buyers followed the global pattern (price 69%, efficiency 49%, safety 38%).

But in several areas, U.S. consumers are significantly different:

Chinese car buyers stand out in the study because price is among the top three concerns for just 23% of buyers – the lowest of any country and well behind safety (62%), power and performance (41%) and interior comfort (29%). China leads in all three of those categories.

There are differences between Chinese car buyers and those in the rest of the world. The average age of a new-car buyer in China is 35, compared with an average of 52 in eight European countries and the U.S.

Chinese car buyers entered the automotive economy at the same time as the Internet was established, so in China, says Neuly, about 79% of customers researched their purchase on the Web, and 61% are ready to choose and pay for a car on the Internet.

Some 55% of Americans used the Web (58% is the global average) on their last purchase, but only 36% said they would consider buying via the Internet.

Globally, 32% say they would consider using the Internet to purchase, with Belgian consumers least enthusiastic, at 8%. Belgium suffers from political tension between two language groups, and fewer people there buy anything on the Internet because they don’t trust it to protect their private life.

For getting information about their most recent purchase, 58% of Americans put test drives in the top three choices, highest among the countries. (Italians were at the bottom, at 25%). Japanese, Germans and Americans are the consumers least likely to put the advice of their friends, mechanics or dealers in the top three.

However, Americans are more loyal to their dealership than buyers in the other countries, with 42% saying they definitely would return to the same dealer for their next car, against a global average of just 29%. Only 2% said they definitely would not go back to the same dealer.

When it comes to brands, Japanese customers are by far the most patriotic, according to statistics gathered by the French semi-public BIPE agency. It says 94% of new-car sales in Japan are Japanese brands. Germans buy 57% German brands, followed in patriotism by France (53%, considering Renault’s Dacia subsidiary to be French), the U.S. (31%), Italy (29%) and China (28%).

While the consumer study illuminates considerable differences in major markets, BIPE and the Observatoire Cetelem are optimistic about the industry’s global outlook.

BIPE anticipates the worldwide light-vehicle market to grow 3.2% this year to 85 million units, followed by a 3.6% increase in 2015 to 88.1 million. China will continue to lead growth next year, says BIPE, although it will slow down.

Although sales in France are increasing, they are little above the record low of last year. BIPE predicts a 1.5% gain this year to 1.8 million units, and a 3.1% rise next year.

“The problem is that the general economy is flat,” says BNP Paribas Personal Finance CEO Thierry Laborde. Southern Europe economies in Portugal and Spain fell further than that in France with the 2008 crisis, says Laborde, but those countries made structural changes that now are bringing faster recovery than in France.

BIPE anticipates the French market to grow to 2.6 million units in 2020, but it will remain third behind Germany (3.4 million) and the U.K. (2.8 million). Historically France has been the No.2 market after Germany.

Cars on the road in the U.K. have the youngest average age in Europe – 7.6 years – in part because the market is heavily influenced by a high percentage of company cars that are renewed frequently, says Neuly.

The average is 9.7 years in Western Europe and 11.4 years in the U.S. The youth of China’s industry is visible in the 4.6-year average age of the fleet there.