Chinese, Indian car consumers 'very different'

The Asian Dragon and the Asian Elephant are often considered as the future economic super powers though taking different routes to the status.

China is far ahead of India in terms of growth and prosperity but he growth seems a little skewed with there being a mismatch between the wealth creation and market behaviour. Indians are poorer but behave like more mature consumers.

Indian car market is very different from the Chinese market in more ways than one and is easier to understand, said K Saito, director (sales & marketing), Maruti Udyog.

The Indian market has matured and a sign of this is that car buyers in India have been upgrading step by step to more powerful and bigger cars that have better features.

In contrast, in China people tent to go straight for higher end cars, giving the go-by to rational consumer behaviour. Hence, in China, bigger cars tend to sell more than smaller cars.

In China most of the purchases are made in big numbers, that is by businesses for their own use or fleet operators. Correspondingly, cars bought individually by customers make up a smaller proportion of the total number of cars sold, than in India where the individual buyer is the king.

Another interesting contrast is in the way car purchase is financed in the two countries. While most Chinese purchase cars with their own money, Indians prefer to go in for car loans to purchase their dream cars.

"The Chinese finance their cars with the money often secured from the sale of property. This is the case with over 80 per cent of the car purchases there," said Saito.

In India the reverse is true. Over 85 per cent of the purchases are financed with car loans. The low interest regime encourages this, says Saito.

Saito was in Bangalore for the launch of the Swift in the city, the 1300 cc car, the latest offering from the Maruti stable.

The Swift is set to be launched in China soon and the "Swift that is to be offered there will be the same as the ones sold in India," Saito said.

That is not the case with the Swift being offered in Europe. Those will have more powerful engines. The engine displacement there will be 1500 cc and 1700 cc.