Diesel Scandal, Hybrid - Hitting Jackpot, Gasoline - Benefited between them

   Diesel gate that exploded right before Chusok makes automobile consumers and stakeholders perplexed. They try to look at the market in somewhat calm eyes after the holidays, but nothing appears clearly. Only a few people believe this diesel engine issue is just a matter of particular company, while many have a question to all diesel vehicles and all German cars, but not confident enough. People say that Diesel engines have unclear future, and the era of hybrid will come but the feasibility is unknown. It feels like that German cars encountered a major crisis while domestic cars faced a great opportunity, but not confident either. When listening to the voice of the consumers who intend to buy a new car within two years, there comes a rough feeling. Let's listen to the words of the consumers.

   Automotive specialist research firm, Consumer Insight (www.consumerinsight.co.kr), asked 100,000 people for whether there is a plan to buy a new car, and which car they prefer in mega-size Automobile Syndicated Study that has been conducted in July every year. In the study conducted in last July, ‘the consumers who intend to buy a new car within two years (31,809 people)’ were acquired, and after the diesel scandal had exploded (September 22), weekly 1,200 samples were selected from these for the past three weeks to conduct 3 exigent opinion polls (1st on September 24, 2nd on September 29 & 3rd on October 8).

   First, they were asked whether to know about diesel scandal which was caused by Volkswagen EA189 engine (Table 1). 93% of the purchase intenders in the survey, which was conducted two days after the scandal, answered as "They knew". This figure has gone up to 98% in the 3rd survey that is very high even considering that they are purchase intenders. It can say that all the consumers know about the event now.

   Next, they were asked about which automaker is associated with Diesel-gate. Only a few of the consumers (10%) from the beginning said that it is just a matter of Volkswagen. That figure has reduced to 6% in two weeks, indicating just a handful of people considering it as a problem of Volkswagen only. On the other hand, the answer for all European cars having same problem went up to 50% in 3rd from 42% in the 1st. Furthermore, a half of purchase intenders considered all European cars having a same problem and three out of four considered that there is a same problem in the domestic cars also (80% in 1st, 74% in 3rd). Majority of consumers are doubting all the automakers.

   Major automobile manufacturing countries were presented to ask about the "Became larger or Became smaller" purchase intention for each country. Answer for "Became larger" in the result of 3rd survey was at the highest with Domestic cars at 32%, followed by Japanese cars at 11%, US cars at 9%, European(Non-German) cars at 4% and German cars only at 2%. On the other hand, answer on "Became smaller" was more than 30% for all the auto manufacturing countries with the exception of domestic, displaying the significant change to negative for all the foreign-made cars. It is a big good news for domestic cars, whereas it is a big bad news for foreign-made cars.

   They were asked about which fuel type they intend to buy as the next question and compared the answer with the result that was answered in July automobile syndicate study. Purchase intended fuel type had rapidly changed in 1st survey right after the diesel scandal, but had no big change after that. The result of 3rd survey was compared with the answer of the entire purchase intenders in the July study. Diesel was the first place at 43% in the July Syndicated study but it has been reduced to 1/2 or less at 21%, while Gasoline at 41% has also been reduced to 36%. On the other hand, Hybrid became three-fold to 33% from 11%, while Electric car that was insignificant went up to 5%.

   Survey result indicates rapid surfacing of Hybrid and Electric car, and sharp declining of diesel and accompanied decrease of gasoline. However, supply-demand in the market is not in accordance with consumers’ preference. Hybrid and electric vehicles supply have a difficulty to fill the decreased margin of diesel. For a while there is a high possibility that gasoline will grow by enjoying the benefit from it. Especially German premium gasoline car seems to have increased demand.

   Powertrain for automakers is like their own children. They cannot discard any of Diesel, petrol, hybrid & electric. However, a strategic decision to focus on which area cannot be avoided. But, they should not to devise another problem from impatience. Diesel gate is at the beginning stage now. Potential to develop into the worst disaster is open wide. Automakers should remind that consumers are contemplating.

  – This study will continue on weekly basis until October 30th

  – For more information please contact

     : Managing Director Yoon Taesun (yoonts@consumerinsight.kr / 02) 6004-7655)

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