Americans not too keen on purchasing cars from manufacturers in China and India: Purchase consideration curve
A recent study has revealed that Americans could shy away from purchasing four wheelers of Indian and Chinese auto companies even though these cars are making inroads into the auto sector in a big way. Indian auto companies such as Tata Motors, Mahindra & Mahindra and Maruti Suzuki offer their vehicles at a global level but these cars may not meet with initial favour in the United States.
Indian and Chinese auto manufacturers looking to expand their reach in global markets may find that they are meeting blocks when it comes to American buyers. The Barometer of Automotive Awareness and Imagery Study indicated that out of persons interviewed only 38% said that they would consider a Chinese vehicle while 30% said that they would opt for an Indian car. This was as against 95% who said that they were sure of purchasing a car from an American company, 76% who would purchase a vehicle of German descent while 75% would purchase a Japanese vehicle and 49% a Korean model. Quality, reliability, performance and safety of models are a major concern.
Initially, Korean auto makers faced the brunt of purchase consideration curve, and now, automakers from China and India are likely to find penetration difficult. However, the younger generation of buyers was open to buying Chinese or Indian vehicles and 52% said they would buy a Chinese model while 41% said they would purchase a car from Indian manufacturers. A number of Indian and Chinese automakers have expressed their intentions to launch products in the US but are yet to go ahead with the same.
On the same note, Mahindra & Mahindra’s US entry couldn’t be too far with the International Arbitration Panel not ruling in favour of automotive dealer Global Vehicles USA. The latter had accused M&M of distribution agreement violation in relation to selling vehicles in US. The ruling says that the agreement between the two parties ended as per terms noted, and as such clears Mahindra any agreement or law violation in the US.