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Car Purchasing Process - China - October 2015

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The market
Figure 1: China total volume new passenger car sales forecast, 2010-20
Companies and brands
Figure 2: Leading companies’ market shares in the China car market, by volume, 2014-15 (till June)
The consumer
German brands are facing challenges, though they still dominate China car market
Figure 3: Brand ownership, July 2015
64% of females claim they are the main drivers
Figure 4: Car driving status, by age and gender, July 2015
Fuel economy and in-car entertainment system generate the lowest user satisfaction
Figure 5: Car performance satisfaction, July 2015
Running errands for family and daily-commuting are the top two reasons for first car purchase
Figure 6: reasons for purchasing first car, July 2015
Safety upgrade is the top reason for replacing cars
Figure 7: Reasons for purchasing replacement cars, July 2015
People have high purchase intentions when it comes to new energy cars
Charging and power problems remain the main barriers to purchase
Figure 8: Reasons for not purchasing new energy car, July 2015
What we think
ISSUES AND INSIGHTS
Brands could promote new energy cars as fulfilling consumers’ daily transport needs
The facts
The implications
Encourage car owners’ second purchase through fulfilling their aspirations
The facts
The implications
What else can brands do to enhance competitiveness?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
New passenger car sales only grew 4.8% in the first half of 2015
New energy car sales increased rapidly
People’ aspirations towards a better quality of life drive further growth
MARKET SIZE AND FORECAST
Strong growth in SUVs and MPVs
Figure 9: Total volume sales of new passenger cars, 2011-15 (till June)
Growth fails to offset the slowdown in total car market
Figure 10: Total volume sales of second-hand cars, 2009-14
New energy cars become a driver of future market growth
Slower growth forecasted over 2015-20
Figure 11: China total volume new passenger car sales forecast, 2010-20
MARKET FACTORS
Purchase intention from new drivers
Figure 12: The number of civil motor vehicles and car drivers, total China, 2012-15 (till June)
Car owners are active in replacing their cars
Demand from lower tier cities
Figure 13: Private car ownership, tier one cities and total China, 2011-14
The relaxation of the One Child Policy may also encourage further growth
Increasing cost of finding a parking space in major cities
KEY PLAYERS – WHAT YOU NEED TO KNOW
Car market in China becomes more competitive than before
Brands are trying different methods to improve competitiveness
Local tech giants are entering the automotive industry
MARKET SHARE
A good year for domestic brands
Figure 14: Sales volume of new passenger cars, by country of the brand, 2012-15 (till June)
Figure 15: Top ten SUV models, by sales volume, 2012-15 (till July)
China car market is becoming more competitive
Figure 16: Leading companies’ market shares in the China car market, by volume, 2012-15 (up to June)
COMPETITIVE STRATEGIES
Working with car rental companies
BMW Zinoro collaborates with eHi Car Services
Shanghai Volkswagen works with China Auto Rental
Dongfeng Nissan partners Baojia to enter car sharing business
Major brands are all investing to compete in the new energy car segment
Volkswagen
Toyota
Hyundai and Kia
Ford
BYD
Car brands are cutting their price to be more competitive
Figure 17: Price cutting tactics implemented by some brands, 2015
WHO’S INNOVATING?
More flexible digital advertising
Local tech giants are moving into automotive industry
THE CONSUMER – WHAT YOU NEED TO KNOW
German brands are facing challenges and losing appeal
Increasing influence from women in car purchasing
American and Japanese brands are scoring higher than German brands on multiple attributes
German cars are very popular among those buying a car to get married
Chinese consumers replace their cars for a better experience
Chinese consumers have high purchase intention towards new energy cars
CAR OWNERSHIP
German brands are facing challenges, but still dominate the China car market
Figure 18: Brand ownership, July 2015
Figure 19: Brand ownership ranking, August 2013 and July 2015
Car owners are open to more brands as they become sophisticated
Figure 20: Brand ownership, by car ownership status, Jul 2015
Figure 21: Car purchase intention, August 2013 and July 2015
Demographic differences
German brands are losing appeal among 30-49-year-olds
Figure 22: Brand ownership, by age, August 2013 and July 2015
High earners are more open-minded when selecting car brands
Figure 23: Brand ownership, by monthly personal income, August 2013 and July 2015
WHO DRIVES THE CAR
64% of females claim they are the main drivers
Figure 24: Car driving status, by age and gender, July 2015
Figure 25: Factors important to consumers in choosing which car to buy, by gender, June 2014
CAR PERFORMANCE SATISFACTION
Fuel economy and in-car entertainment system generate the lowest satisfaction
Figure 26: Car performance satisfaction, July 2015
American and Japanese brands are scoring high on multiple attributes
Figure 27: Car performance satisfaction – any satisfied*, by brand owners, July 2015
REASONS FOR PURCHASING THE FIRST CAR
Running errands for family and daily-commuting are the top two reasons
Figure 28: reasons for purchasing the first car, July 2015
German cars are preferred by those buying a car to get married
Figure 29: reasons for purchasing first car, by brand that people have bought last time, July 2015
Geographic differences also have an influence on consumers’ purchasing reasons
Figure 30: reasons for purchasing first car, by city, July 2015
REASONS FOR PURCHASING REPLACEMENT CARS
Safety is the top reason pushing consumers’ car replacement behaviour
Figure 31: Reasons for purchasing replacement cars, July 2015
Young and old consumers are triggered by different things
Figure 32: Reasons for purchasing replacement car, by age, July 2015
Diverse reasons from consumers with different household incomes
Figure 33: Reasons for purchasing replacement car, by monthly household income, July 2015
PURCHASE INTENTION AND PURCHASE BARRIERS OF NEW ENERGY CARS
People have high purchase intention towards new energy cars
Figure 34: Purchase intention towards new energy cars, July 2015
Who is more likely to purchase new energy cars?
Figure 35: Purchase intention towards new energy car, by demographics, Jul 2015
Charging and power issues are still the top concerns
Figure 36: Reasons for not purchasing new energy car, July 2015
MEET THE MINTROPOLITANS
Basic profile of MinT
Figure 37: Car ownership, by MinT and non-MinT, July 2015
Figure 38: Car performance satisfaction – any satisfied*, by MinT and non-MinT, July 2015
MinT are more likely to buy their first cars because of self-drive travelling
Figure 39: Reasons for purchasing first cars, by MinT and non-MinT, July 2015
MinT are more likely to replace their cars to upgrade their life
Figure 40: Reasons for purchasing replacement car, by MinT and non-MinT, Jul 2015
MinT are more likely to try new energy cars
Figure 41: Purchase intention towards new energy cars, by MinT and non-MinT, Jul 2015
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Fan chart forecast
Mintropolitans
Why Mintropolitans?
Who are they?
Figure 42: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
Figure 43: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
Abbreviations

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