Cautious over auto purchases

Chinese consumers are more cautious about buying vehicles because they have tightened their wallets due to the decreasing impact from the government's stimulus measures and rising house prices, according to a latest industry research.

The overall intention to buy an automobile in the next 12 months has fallen by an annual 21 percent to only 32 percent, AC Nielsen said in its 2010 China Auto Trend Monitor Report after it surveyed 2,000 car owners and potential buyers since April.

Meanwhile, 40 percent of the potential automobile owners said they would spend only 80,000 yuan (US$11,800) to 120,000 yuan on purchasing a car.

"Consumers in 2010 are becoming more realistic when it comes to purchasing an automobile," said Georgia Zhuang, head of the firm's auto research department in China.

After an unexpected surge last year, China's vehicle sales have fallen monthly since April after the government wound down its stimulus on small cars.

The sluggish stock market and rising house prices also tightened consumers' wallets and changed their financing means. Most will still pay cash fully but 29 percent will take out a bank or dealer loan, up from 25 percent from the previous year, Nielsen said.