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Purchasing Behavior and Perception on Safety among Car Drivers: A Study in Klang Valley

Mohd Hafzi Md Isa1, Aqbal Hafeez Ariffin2, Zulhaidi Mohd Jawi3 & Khairil Anwar Abu Kassim4 Vehicle Safety and Biomechanics Research Centre, Malaysian Institute of Road Safety Research, Malaysia Email Address: [email protected], [email protected], [email protected] & [email protected]

Abstract There has been a significant increase in the consumer interest in the safety performance of vehicles in the past decade. On the contrary, public perception on the importance of vehicle safety in the purchase decision process, particularly in the South East Asia region, is hardly understood due to lack of studies. Thus, the current study was embarked upon to identify and explore the car purchasing behaviour and perception towards safety among car drivers which focusing on the Klang Valley areas. Self-administered questionnaire were distributed among car drivers at public venues such as rest areas, shopping complexes, restaurants and exhibitions. In terms of purchasing behaviour, the main reasons for purchasing the present cars were purchasing for family members, purchasing for business purposes, replacing the old cars, purchasing first cars and purchasing for family members; whereas the main sources of information used were car dealers, manufacturers, friends and families. The findings from this study also indicated that safety features are regarded as the most important factors considered in the purchase of new cars, followed by comfort and price. In addition, relatively high proportions of the respondents had some knowledge and were willing to pay extra for car safety technologies (e.g. airbags, ABS and ESC), and supported the establishment of ASEAN New Car Assessment Program (NCAP). The findings obtained from this study are important for policy makers, manufacturers and other stakeholders to assist in setting priorities with regard to the promotion of car safety in the country. Keywords: purchasing behavior, car safety, safety features, and willingness to pay.

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Technology, Science, Social Sciences and Humanities International Conference 2012

1. Introduction It is known that the safety features of specific models car manufacturers sell in the developed regions or countries and those exported to or assembled in the ASEAN countries are different. Car price factor is still highly linked to the automotive structure in this region that is always offering the cheapest option among all brands as well as the fact that car models are more often than not come in several variants in which the lower one will have more safety features taken out (Mohd Hafzi et al., 2010). Such situation may have encouraged manufacturers, assemblers and traders to capitalize on by providing lesser safety equipment vehicles for ASEAN countries, relative to what is available in their country of origin and other developed markets. A consumer test called NCAP (New Car Assessment Program) is a car safety assessment oriented program conducted by an independent body through destructive testing and non-destructive approach. The test result is then summarized into a rating system and shared for public information. There are currently eight NCAPs in the world and all these NCAPs have established very informative databases for consumers to refer to, and have so far succeeded in their mission to promote vehicle safety in their respective countries and regions. Correspondingly, in support of Global Plan of the United Nation Decade of Action for Road Safety 2011 – 2020, FIA foundation has established Global NCAP with the aim of supporting the development of new NCAPs in emerging markets where vehicle growth is strong but independent consumer information on crashworthiness is not readily available. Tremendous economic growth, high demand for mobility and emerging initiative for road safety in the South East Asia region has attracted Global NCAP to support the establishment of ASEAN NCAP which was initiated by the Malaysian Institute of Road Safety Research (MIROS). In conjunction with the implementation of ASEAN NCAP and also the lack of studies conducted on vehicle safety in this region, a study needs to be conducted in order to understand the overall situation of purchasing behaviour and perception towards safety among car owners. Thus, this study intends to achieve the following specific objectives: 1) to determine the purchasing behaviour of car owners in terms of reasons for purchasing and sources of information used for car purchasing; 2) to determine the importance of vehicle safety when making purchasing decision of new cars; and 3) to determine the level of public knowledge and willingness to pay for car safety features. The findings presented in this study only included data collection conducted in Malaysia, specifically in Klang Valley area. This study is part of a bigger project which involved three other South East Asia countries, namely Singapore, Thailand and the Philippines. Furthermore, the findings obtained comprise of purely descriptive analysis which is useful as an overview document and helpful in understanding the overall situation of the specified objectives. 2


2. Methods 2.1. Development of questionnaire The content of the questionnaire was designed based on literature reviews and study needs. It comprises of three main parts: Section A: Car Ownership & Purchasing Behaviour; Section B: Airbag, Anti-lock Braking System (ABS) & Electronic Stability Control (ESC); and Section C: Personal Information & Road Accident Experience. For questions regarding willingness to pay (WTP) on Section B of the questionnaire, contingent valuation method was used with multiple choice questions. These options ranged from MYR50-150 to more than MYR550 in six choices that were developed based on a pilot study. Flash cards were designed which contained pictorial introduction and presentation of the scenario of the respective car safety technologies, including available evidences on efficacy and injury risk benefits. 2.2. Sampling and procedure Klang Valley area was selected for the prevalence study by considering the fact that it is a highly populated area for car owners in Malaysia. The questionnaires were distributed at public venues such as rest areas, shopping complexes, restaurants and exhibition centres. A simple random sampling technique was adopted in the study to select the sample respondents. Basically, the respondents were approached and asked to fill up the questionnaires. Appointed enumerators were present to monitor the survey which took about 10 minutes per set to complete. To ensure the reliability of the information obtained from the respondents, the enumerators were recruited through interview process and trained for data collection. The data collection started on 1 March 2012 and ended on 1 May 2012. A total of 1104 copies of the study questionnaire were distributed and 1000 copies that met the inclusion criterion were analyzed. 2.3. Data analysis Data key-in was performed using the template designed in Statistical Package for Social Science (SPSS) version 16.0. The collected data set was properly verified to ensure any missing information was dealt with before the data analysis began. The data consisted purely of descriptive analysis.

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3. Results 3.1. Demographics profiles and crash involvement Based on Table 1, the proportion of the respondents between males and females is almost comparable, with slightly higher for males (58.4%). The respondents’ age and driving experience recorded an average of 33.4 and 11.6 years respectively. In terms of education level, respondents with college/ university education level recorded a high percentage at 64.3%. About 40% of the respondents have experienced and involved in road accidents. Respondents with middle income constitute more than half of the total respondents (56.0%). Table 1. Demographic information of the respondents Variables Agea (years) Genderb Male Female Highest level of educationb Did not attend school Primary/ elementary school Secondary/ high school College/ university graduate Post graduate Driving experiencea (years) Previous road accident b Yes No Household incomeb Low (MYR2,000) Middle (MYR2,001 – 7,999) High (≥MYR8,000)

33.4 (10.0) 58.4 41.6 0.2 1.1 27.0 64.3 7.4 11.6 (9.2) 42.3 57.7 29.1 56.0 14.9

Note: The continuous variablesa are explained in mean (standard deviation) whereas categorical variablesb are explained in percentage.

3.2. Car ownership and purchasing behavior In the questionnaire, respondents were asked on car ownership, reasons and sources of information used to decide on the purchasing of their present cars. Based on Figure 1, most of the respondents owned national cars, namely Proton (38.9%) and Perodua (28.9%). Furthermore, most of the respondents owned new cars (67.1%), followed by second-hand cars (30.3%) and third-hand cars (2.6%).

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Figure 1. Distribution of cars owned by the respondents according to makes

The main reasons for purchasing the present car(s) are purchasing for family members, purchasing for business purposes, replacing the old cars, purchasing first cars and purchasing more suitable cars (Table 2). In terms of main sources of information used to purchase present cars, a majority of the respondents selected friends/family and car dealers/manufacturers, as shown in Figure 2. Table 2. Reasons for purchasing present cars Reasons

%

Purchasing for family members

32.0

Purchasing for business purposes

28.2

Replacing old cars

26.2

Purchasing first cars

24.5

Purchasing more suitable cars

21.5

Purchasing safer cars

16.0

Purchasing to replace another transport modes

13.4

Replacing vehicles damaged in a crash

2.7

Others

3.6

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Figure 2. Sources of information used when purchasing present cars

Respondents were also specifically asked to indicate the top three factors they would consider if given the chance to buy a new car. Most of the respondents chose safety features as the most important factor (64.4%), followed by comfort (51.6%) and price (43.9%). Figure 3 illustrates the proportion of vehicle-related factors considered by the respondents in the new vehicle purchase. Figure 3. Factors considered by the respondents when purchasing new cars

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3.3. Knowledge and perception towards NCAP The respondents were also requested to choose whether it would affect their purchasing decision if they knew about the safety performance of cars tested in crash tests. More than half of the respondents felt that knowledge of car safety performance would greatly affect their purchasing decision (Figure 4). In addition, as shown in Table 3, most of the respondents regardless of whether they knew about NCAP or not supported the establishment of ASEAN NCAP. Figure 4. Influence of knowledge of car safety performance on purchasing decision

Table 3. Knowledge and perception of respondents towards NCAP

Knowledge of NCAP Total

No Yes

Opinion on SEA region to have its own NCAP No Yes Not Sure 26 390 113 17 410 44 43 800 157

Total 529 471 1,000

3.4. Knowledge and willingness to pay for car safety devices Among all the safety devices listed in the questionnaire, more than 90% of respondents have some knowledge and have heard about airbags. This is followed by both ABS and ESC. Furthermore, respondents were asked on how much they were willing to pay extra for the installation of car safety devices. A relatively high proportion of the respondents were willing to invest more on their cars in order to be equipped with the safety devices; airbags (81.1%), ABS (74.2%) and ESC (59.9%). As expected, most of the respondents who were willing to pay extra for all the three safety devices chose the lowest category (MYR50-150), as shown in Figure 5.

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Figure 5. Influence of knowledge of car safety performance on purchasing decisions

40

Percentage (%)

35 30 25

Airbag

20

ABS

15

ESC

10 5 0 50-150

151-250

251-350

351-450

451-550

>550

Malaysian Ringgit (MYR)

4. Discussions The automotive industry is unique in each country and that explains the situation in Malaysia whereby the majority of respondents in this study owned the so-called “national cars” e.g. the likes of Proton and Perodua. The domination is made possible via government policies – tariff and non-tariff barriers – that resulted in the national cars capturing around 60% of the market share for passenger vehicles (Mohd Rosli, 2006; Zulhaidi et al. 2011). Therefore, this survey reflects the situation in Malaysia’s automotive market in which the national cars become the most affordable personal transport vehicles. When asked for the purpose of making the purchase, these reasons become the most notable ones – purchasing for family members, business purposes, first car and more suitable cars, and replacing the old ones. This fact is perhaps a reflection of affordability or purchasing power among the users that increased over the years – seen in the stability of annual vehicle sales (Total Industry Volume - TIV) (Zulhaidi et al., 2011) as well as the abovementioned results from this study. It is an easy decision to change to new cars but users nowadays are looking for more specific-purpose cars or lifestyle cars. Though the conventional sedan (small, medium and large) is still dominating among all car classifications, users have shown great interest to the likes of MPV, SUV, crossovers, performance car, pickups and also the hybrid and small cars with regard to fuel consumption and city driving ease-of-use. Thus, the above fact explains what “more suitable car” could mean and meanwhile “buying for other family members” would probably for the spouse or for the children 8


or what is regarded as “family’s second car”.

This survey also found that most users are relying on either their friends/family members, or the car dealers/manufacturers as the main sources of information that help their decision. This is consistent with previous findings (Koppel et al., 2008; Vrkljan & Anaby, 2011). This can be linked to the above discussion on the family matters with regard to perhaps the choice of body style and specific car brands; and also the specifications (e.g. model variants) or certain privileges offered by the car producers/traders (e.g. longer warranty period, goodies, etc). Though being speculative, friends and families may share the experience on specific car brands they previously or currently owned that influence their decision to make the purchase. The findings of the current study also indicate that safety features are regarded as the most important factors considered by the public in the purchase of new cars, followed by comfort and price. It is still a premature fact to be discussed, but the result is quite surprising that safety came first of all the listed factors. In a positive manner, that shows users nowadays have higher awareness towards safety performance and equipment. In addition to that, users are also being exposed to safety information that today become more obvious in car brochures and advertisements, in the news as well as from the government initiatives via improved Vehicle Type Approval (VTA) and independent vehicle rating such as Malaysian Vehicle Assessment Program (MyVAP) (Aqbal et al., 2010). Even though Malaysia or this region has yet to release any result of crashworthiness testing or famously known as NCAP, results from other countries are always accompanying the ads and be the reference among the users for cars’ safety performance. Car safety is one of the main factors considered in the developed countries where information on crashworthiness ratings is available. For example, in a study conducted by Dohring Company in the United States, 83% of the respondents reported that vehicle safety would be either “important” or “very important” consideration when purchasing their next vehicle (Dohring Company, 2003). Furthermore, in Sweden, the respondents ranked safety-related features in cars as the most important factor to be considered for new vehicle purchase than any other factor e.g. price, performance etc. (Koppel et al., 2008). Another study in Canada revealed that safety and reliability were rated as the most important factors when deciding which vehicle to purchase (Vrkljan & Anaby, 2011). Furthermore, the findings of the current study reveals that a relatively higher proportion of the respondents would reconsider their decisions if they knew about the safety performance of cars tested in crash test and support the implementation of ASEAN NCAP. This is a positive finding which further supports the ASEAN NCAP 9


initiative in providing consumer-based information towards promoting safer cars in this region. Apart from that, more than half of the respondents were willing to pay extra for car safety devices e.g. airbags, ABS and ESC. This is consistent with the finding of a previous study whereby Swedish vehicle owners were willing to pay extra on vehicles with higher estimated safety level i.e. active and passive safety systems (Andersson, 2005). This study also indicates that a relatively high proportion of the respondents were willing to pay but with minimal investment (MYR50-150). There were some limitations identified in our study. Firstly, some of the respondents may have surmised that the research was aimed at checking their safety concern though the questionnaire was designed in such a way as to avoid over-emphasis on safety. It is also to be noted that the findings of this study are purely based on the respondents’ responses which are primarily within urban settings and more than half of the respondents were of middle and higher economic status which perhaps suggests higher WTP. Even though multiple choice questions showed no evidence of range bias or mid-point bias as documented in a previous study (Ryan et al., 2004), this method might not be the best approach for eliciting WTP. Other methods i.e. conjoint analysis or discrete choice modelling (Ryan and Farrar, 2000) should be explored as well to assess the feasibility of the methods in the context of WTP towards car safety technologies. In addition, respondents’ lack of knowledge on the true values (MYR) of the safety devices might also lead to potential bias. To reduce information and interviewer bias, flash cards with fixed pictorial presentation of the safety features and short introduction on injury risk benefits were presented to the respondents prior to answering the WTP questions.

5. Conclusions This study has successfully explored a number of interesting findings regarding purchasing behaviour and perception on safety among car drivers in Malaysia. The findings could be enhanced by comparing findings of similar studies between other ASEAN countries namely the Philippines, Thailand and Singapore which are also within the scope of this study. Further study to investigate the effectiveness of ASEAN NCAP programme towards ASEAN countries, particularly Malaysian consumers’ perception regarding vehicle safety should also be carried out for the next phase. This is very important to determine whether the crash test programme will directly influence consumers’ decision when purchasing new cars.

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In addition, future research should focus into issues related to child safety seat (CSS) since the restraint system is part of the overall vehicle safety system and designed primarily for children. Besides, it is also being incorporated as one of the main elements for ASEAN NCAP assessment. Currently, there are no provisions making it mandatory for adults ferrying small children in the car to use proper CSS in Malaysia. Therefore, it is interesting and important to further investigate the consumers’ knowledge, perception, WTP and barriers towards CSS usage. Many research questions and potential future studies arise from the results and limitations of this study. It is hoped that this study will be useful for policy makers, manufacturers and other stakeholders to assist in setting priorities with regard to the promotion of car safety in the country.

6. Acknowledgements This study would not have materialized without the financial support provided by the Global NCAP (MIROS Registered Research Grant No. EN101021). The authors would also like to express their gratitude to those who were directly or indirectly involved in the data collection and analysis. Special mention goes to Ir. Fuad Abas for his valuable advice and comments on the paper.

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