Thanks to increasing income levels and improving economic conditions across Asia Pacific, a number of emerging markets are now experiencing their second wave of new car buyers—those who are replacing their car for the first time, or perhaps buying a second car. Within the region, it’s the emerging Southeast Asian markets that represent some of the most significant opportunities in the years ahead.
Solid economic outlook is creating an entirely new wave of car buyers: the consumer class. Identified as those with up-scaling lifestyles and discretionary spending, this cohort is expected to grow significantly, from 30 per cent of the population in 2013 to 55 per cent in 2020, representing a population size of about 400 million. Adding India and China, the 2020 figure is closer to 2 billion people in the consumer class, representing a substantial pool of potential new car buyers.
As the auto sector seeks to identify new ways to connect with and engage potential car buyers, there are a number of shifts taking place that will have an impact.
The internet and burgeoning connectivity has turned the traditional approach to researching cars on its head. Consumers have more access than ever before to new car specifications, comparisons between makes and models, expert reviews and opinions, and of course the opinions and recommendations of their personal networks via social platforms.
How we buy cars is also changing. While in the past, an overwhelming majority of new car sales took place on the showroom floor, today there are a multitude of new channels, from e-retailers to mobile apps and everything in between.
There are ample opportunities for the auto sector to experience solid growth across the Asia Pacific region in the coming years. But as shifts in consumer behaviours, attitudes and lifestyles continue to re-shape the approach to researching, shopping for and buying new cars, the role of the auto brand has never been more critical. Capturing the car buyer’s attention and keeping it throughout the path-to-purchase journey requires creativity, understanding of consumer motivations and drivers, and constant re-enforcement of brand values.
Bryan Enders is managing director - automotive industry group, North Asia for Nielsen