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China’s Automotive Market: Consumer and digital marketing insights

To win the hearts and wallets of Chinese consumers, automakers must use consumer and digital marketing insights.

Overview

Over the past 20 years, profound social, economic and cultural changes in China have converged to create a consumer automotive market that is unlike any other.

Even if exceptional compound annual growth rate (CAGR) of 18.1 percent is not expected to continue, there is no doubt that China will remain the number one car buying nation for years to come. There is still plenty of time and room for local and foreign auto manufacturers to capture significant market share.

At Accenture, we believe the original equipment manufacturers (OEMs) that will fare best in China are those that truly understand the needs and preferences of Chinese consumers and then give them what they want—in terms of vehicles and the overall car-buying experience.

Background

China’s spectacular economic growth over the past 20 years is reflected not only in a tenfold increase in its gross domestic product, but also in the emergence of the world’s fastest-growing consumer market.

As incomes in China have risen, so have Chinese consumers’ interest in products that were previously out of their reach. Automobiles fall squarely into this category.

To win the hearts and wallets of Chinese consumers, automakers need to understand the preferences and behaviors of the consumers they are hoping to reach.

Consumers believe that digital marketing can help align the automaker’s message and value proposition with their own reasons for buying. When insights and digital marketing converge, consumers can take advantage of a car-buying experience that is faster, simpler and more enjoyable. And automakers can more confidently move into the fast lane of growth, profitability and high performance.

Key Findings

Insights into Chinese consumer’s preferences when it comes to car-buying:

  • Brand prestige—even among smaller vehicles—will continue to play an important role in purchasing decisions. Most consumers are attracted to tangible, distinguishable features, such as brand, appearance and engine performance. These features can increase their perceived economic or social status.

  • Telematics services play an increasingly important role in Chinese consumers’ vehicle purchasing decisions. In fact, 85 percent of consumers look for in-vehicle technologies and 75 percent acknowledge they would spend more for a vehicle with the right telematics services.

  • Chinese consumers rely predominantly on four factors when deciding which car to buy: 49 percent look to recommendations from friends and colleagues; 64 percent seek advice from family members; 53 percent look at manufacturer websites; and 64 percent are influenced by opinions shared via social media. The car-buying experience for them is much more deliberate and involves Web-based searches, combined with test-drives at local dealerships.

  • Chinese consumers basically want three things when it comes to their digital experience: more access, more content and digital features, and an online experience that is simple to navigate.

Despite their differences in demographics and vehicle preferences, Chinese consumers share at least one important characteristic: the expectation for a personalized and satisfying customer experience.

Recommendations

At Accenture, we know that creating a satisfying end-to-end customer experience is a hallmark of high performance and an imperative for all companies, in all markets.

In China, however, the issue is made more complicated by rapidly growing and changing expectations, the high influence of others’ experiences (both positive and negative) on purchasing behaviors, and the variety of direct and indirect sales channels that are needed to cover a country and customer base of such considerable size.

We believe that digital marketing holds particular promise for automakers looking to build strong consumer relationships and increasing car sales. In fact, the digital channel will soon be the predominant method of interaction. Nearly 3,000 Chinese respondents to a recent Accenture survey made it clear that they would like the auto industry to offer a better and more customized online experience.