Market Insight: Light-car buyers tell their story

THE lights are well and truly on in Melbourne this week, with the general public filtering in to ‘Jeff’s Shed’ following the star-studded unveilings at the Australian International Motor Show on Friday – many of which were all-new light cars.

As GoAuto has documented, light cars have become an increasingly significant part of the Australian new-vehicle market, second only to small cars as the biggest segment in the land and accounting for more than 13 per cent of the entire market.

And the importance of these ‘leading lights’ was plain for all to see in Melbourne.

Unveiled at the show were the new-generation Toyota Yaris, Holden Barina and Hyundai Accent, to name models from three of the biggest brands in the business, along with other high-profile contenders including the Kia Rio, Skoda Fabia, Suzuki Swift Sport (shown via the S-Concept) and the eco-oriented Prius C hybrid and Chinese-built EDay Life E15 electric car – all of which are coming soon to Australia.

These were just a taste of a diverse range of light cars heading our way, from emerging markets such as China (with the Geely Panda, for example) at one end of the spectrum through to fully mature Europe, which will bring us the Opel Corsa next year and, a little further down the track, the BMW i3 – among many other models in the pipeline from a range of brands.

From top: Holden Barina, Hyundai Accent hatch, Kia Rio, Skoda Fabia, Suzuki Swift S-Concept.

The latest data from Roy Morgan Research reflects Australians’ heightened interest in light cars, with its comprehensive ‘single source’ surveys – which are based on approximately 1000 interviews conducted each weekend – showing a marked rise in the percentage of people intending to buy a light car in the next four years (as opposed to a larger vehicle), up from 5.5 per cent in April 2006 to 7.4 per cent in April this year.

Although these ‘intenders’ dropped to 6.3 per cent in the first half of last year, the percentage of people planning to buy a light car has been on a steady climb since June 2010 as new models hit the market and as other factors such as consumer confidence improved.

Of course, not all brands are driving this growth, with the top eight models that are ‘most intended’ over the past five years experiencing mixed fortunes.

As the graph shows, Ford’s Fiesta and Volkswagen’s Polo have helped drive the overall gains in the segment, while others – Honda’s Jazz, for one – have lost favour, with the Honda light car falling from 15.2 per cent in March 2010 to just 6.5 per cent in April this year.

Toyota’s Yaris has fluctuated wildly, from heights of more than 30 per cent during 2007 to half that – 15.4 per cent – in October 2009. While it climbed back to more than 25 per cent last year, it has fallen again in 2011.

It all makes for a much more even playing field in the market, and brings into focus the attitudes of consumers who are intending to buy, and those who have just bought, a light car.

Roy Morgan data studying ‘automotive attitudes’ over the past 12 months – April 2010 to April 2011 – shows that Australians who have purchased a light car over this period have strong opinions on aspects such as fuel efficiency, safety, standard equipment levels and brand reputation.

The vast majority of those people surveyed (81.6 per cent) agreed with the statement that fuel efficiency is more important than high performance, while safety was the number-one concern when choosing a vehicle for 76.9 per cent of respondents.

Other key factors involved in the purchase decision were that the car has all the extras as standard (69.6 per cent), that a lot of time was spent researching before making the decision (69.5 per cent) and that a proven track record and a long warranty were essential (69.0 per cent and 68.3 per cent respectively).

Notably, 50.6 per cent of light-car owners said they would seriously consider buying a hybrid – not a large percentage by any stretch, but much higher than the 33.6 per cent who said they would consider buying a fully electric vehicle and 33.4 per cent who would consider diesel.

Only 44.6 per cent agreed that, within limits, they would buy the cheapest car in its class.

These responses from new-vehicle purchasers make interesting reading alongside those surveyed who intend to buy a light car in the next four years.

Surveyed over the same 12-month period ending in April this year, the vast majority of these light-car ‘intenders’ agreed that fuel efficiency was most important (82.8 per cent), but the next key motivations were having all extras as standard (76.4 per cent), a proven track record (74.9 per cent) and a long warranty (70.4 per cent).

There were similar results in terms of researching before they buy (70.4 per cent), and high preferences for safety (68.3 per cent) and for looks and style, after reliability (68.2 per cent).

Again, a small majority of light-car ‘intenders’ agreed that they would seriously consider buying a hybrid (55.8 per cent), compared to a smaller percentage seriously considering an EV (27.1 per cent) or diesel (25.8 per cent).

While there is no stopping the manufacturing juggernaut, the buying patterns and attitudes of Australian consumers – and the key factors that are driving their purchasing decisions – are a useful tool for local car companies in determining vehicle specifications and model line-ups, as well as providing an insight into whether a particular car will succeed in this market.

The lights are definitely on. But some bulbs will shine more brightly than others, and some won’t glow much at all.