Automobile Purchase Behavior 4:
                -‘Larger car’ Sought Consumers are Migrating to
                ‘SUV & Imports’

  Korean automobile consumers’ love for large car is exceptional. It was a natural trend to buy a big car when changing the car. This trend, although, started to decrease as the switching volume to imported cars and SUV became larger after the global financial crisis. For the past five years, this switching had decreased significantly, yet has been standing as the most significant trend. The interest of consumers in fuel economy and safety has a possibility to lead ‘Imports SUV with good fuel economy’ as the optimal alternative.

  Automotive specialist research firm, Marketing Insight (www.consumerinsight.co.kr), asked the consumers, who purchased additional or replacement new car in the past 1 year, about which car was the previously owned model and which was newly purchased car in Automobile Syndicated Study that has been conducted in July every year. Their recently purchased vehicles and previously owned vehicles in 2014 study are summarized by vehicle class [Table 1].

  In this year's study, the most highly purchased passenger cars during the past one year was SUV (23.5%), which accounted for the largest share among the 9 passenger car segments. This appears to be the result of recent outdoor activity boom such as camp and interest in safety, working at the same time. Following in the next were three sedan segments, i.e., Midsize, Sub-mid and Mini (14.8%, 14.6%, 14.5%, respectively), all of which had gather around 14% range. Imported cars (13.4%) followed after them with a slight gap.

  When looking into which segment passenger cars they had in the past, it is possible to know which segment is recently increasing and which one is decreasing. In the ranking of the largest gap between recent purchase rate and previous ownership rate, SUV took the lead with 9.0%p increase, followed by imported cars (+7.8%p) and Mini (+4.8%p), in order. On the other hand, in the ranking of the largest decrease size, Midsize (-7.2%p) and Sub-mid (-6.9%p) were the largest, followed by MPV (-6.3%p). In summary, the increase of SUV and imported cars, and decrease of Midsize·Sub-mid·MPV were clearly seen.

  To examine how the passenger cars had been changed by consumers in the entire passenger car market, the switching pattern between the segments in the past 10 years was analyzed. Currently in 2014, the largest switching trend among segments is ‘From sedan to larger sedan’ (14.5%), followed by ‘From sedan to sedan in same class’ (13.0%), ‘From sedan to SUV’ (11.5 %), ‘From domestic to imported cars’ (9.1%) and ‘From sedan to smaller sedan’ (8.4%), in order [Table 2]. When comparing this with the trend of 10 years ago in 2005, the most highly increase is ‘From domestic to imported cars’ (8.0%p), followed by ‘From sedan to smaller sedan’ (3.8%p). The largest decrease was found in ‘From sedan to larger sedan’ (-6.8%p) and ‘From first-time to Sub-mid’ (-2.7%p). This result reveals the ongoing phenomenon of greatly reduced tendency to seek after larger cars and familiar change of moving down to smaller car.

  In order to examine how and when such changes had happened, the trend of past 10 years was arranged by selecting the 5 major currents [Figure 1]. From this data, one can know that there has been several major changes between 2005～2014. First, the situation before and after the global financial crisis is greatly different. Before the global financial crisis, there was no significant change but after the incident, dynamic changes that affecting each other became active. The most significant change is the decrease in ‘From sedan to larger sedan’ and the increase in ‘From domestic to imported car’. 6.8%p decreased ‘From sedan to larger sedan’ and 8.0%p increased ‘From domestic to imported cars’ infer that there is a significant relationship between them. In other words, the purchase of imported cars can be an another expression of the desire to have a larger car.

  Another interesting phenomenon is the contrast of ‘From sedan to SUV’ with ‘From sedan to smaller sedan’. ‘From sedan to smaller sedan’ turned to decrease from increase at the turning point in 2012, while ‘From sedan to SUV’ turned to increase from decrease with the same turning point. Of course, this doesn’t necessarily means that people who wanted to buy smaller sedan migrated to SUV. Perhaps, the significant part of switching tendency to larger sedan and sedan preferred tendency seems like to be converted into a desire to want SUV and imported cars.

  Currently, automobile consumers are very dynamically moving. ‘SUV’ and ‘imported cars’ are a new switching tend that dominates the current market, and ‘Fuel economy’ and ‘Safety’ are the main interests of consumers. ‘Imports SUV with good fuel economy’ applies perfectly to such conditions.

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