Indian, Chinese Autos Underwhelm U.S. Buyers
Only one-third of vehicle buyers in the U.S. are willing to consider Indian and Chinese auto manufacturers, according to GfK. That's compared to 95% consideration for U.S. manufacturers.
Significant barriers exist for automakers such as Tata, BYD and Mahindra, according to GfK's Barometer of Automotive Awareness and Imagery Study. They could face a purchase consideration curve similar to what the Korean automakers encountered when they launched in the U.S.
In that case, it took more than 15 years for people to significantly increase their consideration to purchase South Korean nameplates such as Kia and Hyundai. Both Kia and Hyundai reported stronger July auto sales than Honda and Toyota. Hyundai said its sales rose 10% in July to 59,561 -- an all-time sales record for the month. Kia sales rose 26.4% to 45,504 vehicles.
However, while Chinese cars remain popular within the homeland along with select parts of Asia, quality control issues make the vehicles less attractive in the U.S. market.
Marketing is critical if the foreign automakers hope to have a chance at making inroads.
"For Indian and Chinese auto manufacturers to accelerate the adoption curve and build loyalty quicker than Korean automakers did, they must hit the ground running and communicate their story to potential buyers," said Don DeVeaux, managing director, New York-based GfK Automotive, in a release. "They need to make consumers comfortable with the brand and secure in their purchase decision by providing their proof points for quality, customer support and technology, as well as demonstrating their commitment to innovation."
The openness to purchasing a Chinese and Indian vehicle is highest among Gen Y consumers, with 52% saying they are open to a vehicle from a Chinese automaker and 41% saying they are open to a vehicle from an Indian automaker. Openness is lowest among Baby Boomers, only 29% of whom said they would be open to purchasing from a Chinese manufacturer, and 22% said they would purchase from an Indian automaker.