China drivers cut driving times, delay purchases

BEIJING (XFN-ASIA) - Rising fuel prices have led many vehicle owners in China to cut down on driving, while others have delayed their planned vehicle purchases, according to a survey by JD Power Asia Pacific and Sina.com.

According to the online survey, nearly 80 pct of 2,713 respondents said the recent increase in fuel prices has caused them to reduce vehicle usage, while 26 pct of participants who intended to buy a vehicle this year have decided to delay their purchase.

China raised fuel prices nationwide by about 17 pct on June 19, driving up gasoline prices to about six yuan per liter from 5.2 yuan per liter, JD Power said in a statement.

"It appears that at least some vehicle owners have already started reducing the frequency and distance of their driving. Many buyers are also delaying vehicle purchases, and are instead turning to public transportation or carpooling to keep their gas expenditures down," said Michael Dunne, Shanghai-based managing director of JD Power Asia Pacific.

Following June's price adjustment, Chinese drivers are expected to spend an average of 12,500 yuan on fuel annually, up from 7,716 yuan in 2004 and 9,744 yuan last year, the statement said.

JD Power expects China passenger vehicle sales to total 5.95 mln units in 2008, an increase from the 5.42 mln units sold in 2007, but a decrease from the 6.2 mln units forecast at the start of the year.

The latest survey also found that about 30 pct of respondents who currently own a vehicle said they are thinking about switching to more fuel-efficient models.

Also, almost 50 pct of respondents who intend to buy a vehicle this year said they were considering buying a Japanese brand because of perceptions of better fuel efficiency, while nearly 90 pct said they expect gasoline prices to rise again before the end of 2008.

The survey was conducted from July 8-15.