Malaysia's Car Ownership Is Third Highest In The World? Far From It

According to a press release issued by market research agency Nielsen yesterday, Malaysia has the third highest rate of car ownership in the world, with 93 per cent of households owning a car.

The press release was picked up by several mainstream news agencies, including major daily newspapers.

Market research agencies like Nielsen regularly issue press releases of some of their survey results as a way to promote their company's services to potential clients.

The problem with Nielsen's 'Nielsen Global Survey of Automotive Demand' survey results is that it they have published a conclusion that would immediately appear as a major error to anyone familiar with research on road transport.

To say that 93 per cent of Malaysians own a car, the third highest in the world is quite shocking to anyone familiar with motor industry statistics!

Considering that the government's own statistics say 80 per cent of Malaysian households (not individuals) earn less than RM3,000 per month, it is quite a long shot to say that only 7 per cent of Malaysian households don't own a car.

There was little need for Nielsen to conduct any surveys regarding car ownership; the data is readily available from most academic institutions and government bodies.

Unlike Nielsen's Internet survey methodology, the metered data gathered by the United Nations, the International Road Federation and the World Bank are far more reliable than Nielsen's claimed behaviour responses.

Data published by the United Nations and the World Bank are commonly used by car companies to evaluate motorisation levels of different countries and to tailor their products accordingly.

Countries with a low level of car ownership tend to require entry-level, low-cost cars and the marketing needs to be tailored towards mainly explaining various aspects of the car to first-time car buyers.

Countries with a high level of car ownership usually have strict emission and safety regulations, and the product needs to appeal to a more demanding group of buyers who already have many years of experience in owning another car (replacement-car buyers).

So then, where does Malaysia rank in terms of car ownership?

For passenger cars, Malaysia is ranked 44th with 341 cars per 1,000 people, one rank higher than Brunei's 327 cars. Thailand is ranked 104th with 74 cars while Indonesia is ranked 119th with 39 cars.

The country with the highest car ownership is a little-known but very wealthy principality called Liechtenstein, located between Austria and Switzerland, with 744 cars per 1,000 people.

Coming in at second place is another tiny but wealthy principality - Monaco, with 729 cars.

In third is another tiny country, Luxembourg, with a population of slightly over half a million. But Luxembourg is one of the richest countries in the world. Nearly every adult there owns a car, at 667 cars for every 1,000 people.

The countries with the highest rate of car ownership are typically small but wealthy countries with a small population. Clearly public transport is not really necessary in such an environment so it is not surprising that car ownership in these countries is much higher than those of other developed countries with a well-established public transportation system.

Statistics for other countries of interest - Germany (12th, 531 cars), France (16th, 482 cars), Sweden (22nd, 466 cars), Japan (26th, 455 cars), UK (27th, 454 cars), USA (37th, 403 cars).   

These rankings look more logical.

All figures are based on the latest (2011) data compiled by the World Bank, using data provided by the International Road Federation and World Road Statistics.

Note that the numbers above only include passenger cars - defined as road motor vehicles other than two-wheelers, intended for the carriage of passengers and designed to seat no more than nine people (including the driver).

Numbers including commercial vehicles would be much higher, as shown by the data below shared by the Malaysia Automotive Institute; compiled from an unspecified source. Although the source may be different, the numbers are more or less similar and are agreeable by industry experts. As you can see, Malaysia's car ownership is far from being the third highest in the world.

In any case, it is quite ridiculous to say that a developing country like Malaysia has a car ownership that is the third highest in the world, because that would mean that our car market is seriously saturated and has very little room for future growth.

So what went wrong with Nielsen's conclusions? Statistics are only as good as the person who interprets the numbers.

Nielsen says the survey results are polled from 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America.

In other words, what the results actually meant was that among the world's population with Internet access, people living in urban Malaysia have the third highest rate of car ownership. That's not surprising considering the poor state of the public transportation network in this country.

To extrapolate the results of an Internet survey and say that it applies to the entire country is quite a stretch.