Table of Contents
Executive Summary
-
- The market
- New passenger car market was in reverse for the second consecutive year in 2019 and was worsened by COVID-19
-
- Figure 1: Sales volume of new passenger cars and used cars, 2014-19
- New passenger car market will plunge to its lowest level in 2020 with slow recovery in the next four years
-
- Figure 2: Forecast of new passenger cars sales volume (adjusted for COVID-19), 2014-24
- Impact of COVID-19 on car retailing
- COVID-19 is accelerating the digitalisation in car retailing market
-
- Figure 3: Short-, medium- and long-term impact of COVID-19 on car retailing, May 2020
- Competitive Strategies
- Car manufacturers are rethinking their official websites to build transparency
- E-commerce platforms innovate with test drive experiences
- The consumer
- More than half consider buying a car online after they have seen in-store
-
- Figure 4: Acceptance of online auto purchase, March 2020
- Offline car dealers are still the major channel for initial price checks
-
- Figure 5: Initial contact of price consulting, March 2020
- Expertise and accurate information can boost offline experience
-
- Figure 6: Aspects for offline to do better, March 2020
- Opportunity to attract more online car buyers by addressing aftersales warranty
-
- Figure 7: Attitudes towards car retailing, by monthly household income, March 2020
- Online channels have the best chance to succeed by delivering transparency and convenience
-
- Figure 8: Potential services for online channels, March 2020
- Brands’ retailing websites are favoured by conservative consumers
-
- Figure 9: Preference for online car retailing platforms, by online car purchasing attitudes, March 2020
- What we think
The Impact of COVID-19 on Car Retailing
-
-
- Figure 10: Short-, medium- and long-term impact of COVID-19 on Car Retailing, May 2020
- Opportunities and Threats
- Disruption in offline retailing means opportunities in online retailing
- Imported brands are facing difficulties, while car brands with domestic production lines show resilience
- Weak performers will be fading out
- Impact on the market
- What we’ve seen so far
- New passenger car market will start to recover from 2021 due to the demand for safer transportation
-
- Figure 11: Forecast of volume sales of new passenger cars, China, 2014-24
- Figure 12: forecast of new passenger cars sales volume (adjusted for COVID-19), 2014-24
- Shifts in consumer behaviour
- Consumers are becoming more realistic about affordability
-
- Figure 13: Economic outlook, May 2020
- Price sensitivity is rising but demands don’t necessarily shrink
-
- Figure 14: Ways of controlling spending – First choice, June 2020
- Growing expectation for brand with assuring aftersales service
-
- Figure 15: Attitudes towards car retailing, March 2020
- How the crisis will affect key consumer segments
- Demand for cars remains strong among consumers with stable employment
-
- Figure 16: Ways of controlling spending on cars, by company type, June 2020
- Consumers with middle and high household income are asking for better services
-
- Figure 17: Can and cannot of offline channels, by monthly household income, March 2020
- How a COVID-19 recession will reshape the industry
- Domestic production becomes for paramount for car brands
- Impact on the marketing mix
- Direct retailing mode is pushing more transparency in car prices
- Online display and marketing are in the leading trend
- Offline channels are transforming into maintenance and lifestyle centres
- COVID-19: China context
-
- Figure 18: Accumulative confirmed cases of COVID-19 in China, January to May 2020
- Figure 19: Status of returning to work, China, March and May 2020
-
Issues and Insights
-
- Consolidating different brands in the same exhibition hall
- The facts
- The implications
- Building long-term relationships with consumers through service
- The facts
- The implications
- Selling online, car life offline
- The facts
- The implications
The Market – What You Need to Know
-
- Negative growth to continue for new passenger car market - used car market is more promising
- Policies and consumers attitudes towards car consumption are strong - infrastructure lagging behind
- Used car sale making up the decline in the new passenger car market
Market Size and Forecast
-
- Total car sales slow - used cars maintain momentum
-
- Figure 20: The sales of new passenger car sales and used car sales, 2014-19
- Total car sales expected to recover slowly in the next five years
-
- Figure 21: Forecast of total car retailing sales volume (adjusted for COVID-19), 2014-24
Market Segments
-
- New passenger car sales expected to plummet in 2020 - slow recovery in the next five years
-
- Figure 22: Forecast of new passenger car retailing sales volume (adjusted for COVID-19), 2014-24
- Used cars sales are going to be an important impetus for the growth of total car retailing market in the next five years
-
- Figure 23: Forecast of used car retailing sales volume (adjusted for COVID-19), 2014-24
Market Factors
-
- Intense launch of beneficial policies
- New policies released to stabilise and expand automotive consumption
- New energy cars are exempt from vehicle purchase tax from 2021 to 2022
- Consumers’ strong purchasing intention for safer transport method
- Car-related infrastructure still lagging behind
- The number of parking lot is still behind the size of registered car numbers
- The number charging facilities for NEVs is still far behind the size of NEV
Key Players – What You Need to Know
-
- Traditional car dealers are embracing the online trend
- E-commerce platforms helping brands to digest long-period stocks in lower tier cities
Competitive Strategies
-
- Out of their comfort zone: car brands establish their own online retailing channels that demonstrate final price
-
- Figure 24: Online retail store of SAIC Volkswagen
- Figure 25: Online retail store of FAW Volkswagen
- Test drives offered on e-commerce platforms
-
- Figure 26: Taobao test drive
- Figure 27: Range Rover test drive on taobao
- E-commerce platforms are sinking aftersales services and long-period stock into lower tier cities
-
- Figure 28: JD auto supermarket
Who’s Innovating?
-
- Autonomous Couriers
-
- Figure 29: Autonomous vehicles
- Car-to-Door
-
- Figure 30: Nissan door-to-door service
- Take a Ride with Me
The Consumer – What You Need to Know
-
- Online car retailing still faces barriers from industry customs and consumers habits
- Customisation and cross-category service to boost the offline experience
- Improving transparency and aftersales assurance the ultimate goal for online channels
Acceptance of Online Auto Purchase
-
- More than half of surveyed consumers are willing to purchase cars online after checking on site
-
- Figure 31: Acceptance of online auto purchase, March 2020
- Consumers have distinct attitudes on purchasing large items online but have blurry thoughts with purchasing small items online
-
- Figure 32: Acceptance of online auto purchase - buying directly online without checking physically, by acceptance of online auto purchase, March 2020
- Consumers’ online car purchasing preference differs by their income levels but not city tiers
-
- Figure 33: Monthly household income and city tiers, by acceptance of online auto purchase - car, March 2020
- Consumers who check cars online are influencing more people around them to purchase cars after COVID-19
-
- Figure 34: Attitudes towards car retailing, by selected demographics, March 2020
Initial Contact of Price Consulting
-
- Walking into car dealers remains the common form of initial contact for price
-
- Figure 35: Initial contact of price consulting, March 2020
- Potential online car buyers utilise online channels to consult on price
-
- Figure 36: Initial contact of price consulting, by acceptance of online auto purchase, March 2020
- Online channels are mostly used by first car buyers
-
- Figure 37: Initial contact of price consulting, by type of car ownership, March 2020
- Car zones and shopping malls reach young consumers with convenience
-
- Figure 38: Initial contact of price consulting, by age, March 2020
- Quality of information is more important than quantity for direct online buyers
-
- Figure 39: Attitudes towards car retailing, by selected demographics, March 2020
Aspects for Offline Channels to Do Better
-
- Offline channels can deliver on convenience when price transparency isn’t feasible
-
- Figure 40: Aspects for offline to do better, March 2020
- Offline should provide more customisation and cross-category services to retain online buyers
-
- Figure 41: Aspects for offline to do better, by acceptance of online auto purchase, March 2020
- Customised and experiential services are still more applicable offline
-
- Figure 42: Aspects for offline to do better, by car purchasing budget, March 2020
- Customisation works more efficiently for lower tier cities
-
- Figure 43: Aspects for offline to do better, by city tiers, March 2020
- Sales service attitude outweighs over in-store environment
-
- Figure 44: Attitudes towards car retailing, by selected demographics, March 2020
- Most consumers are willing to pay more on car price for longer period service of repair and maintenance
-
- Figure 45: Attitudes towards car retailing, by selected demographics, March 2020
Potential Services for Online Channels
-
- Transparency and convenience are the top strengths of online channels
-
- Figure 46: Potential services for online channels, March 2020
- Expectation towards extra aftersales services is high among potential online buyers
-
- Figure 47: Potential services for online channels, by acceptance of online auto purchase, March 2020
- Consumers with higher budgets ask more for customisation online, while low-budget consumers care more about aftersales service
-
- Figure 48: Potential services for online channels, by car purchasing budget, March 2020
- Free refund in 7 days makes great difference among potential online buyers
-
- Figure 49: Attitudes towards car retailing, by selected demographics, March 2020
Preference for Online Car Retailing Platforms
-
- The fight between brands’ websites and third-party e-commerce platforms
-
- Figure 50: Preference for online car retailing platforms, by online car purchasing attitudes, March 2020
- Consumers’ interest in specialised e-commerce platforms rises with budget
-
- Figure 51: Preference for online car retailing platforms, by car purchasing budget, March 2020
- First-time car buyers trust the official channels the most
-
- Figure 52: Preference for online car retailing platforms, by age, March 2020
- Official events play an important and effective role in convincing and engaging potential online buyers
-
- Figure 53: Attitudes towards car retailing, by selected demographics, March 2020
Appendix – Market Size and Forecast
-
-
- Figure 54: The sales volume of new passenger cars and used cars, 2014-24
-
Appendix – Market Segmentation
-
-
- Figure 55: The sales volume of new passenger cars, 2014-24
- Figure 56: The sales volume of used cars, 2014-24
-
Appendix – Methodology and Abbreviations
-
- Methodology
- Abbreviations
Back to top