Car Purchasing Process - China - October 2017

OVERVIEW
What you need to know
Covered in this Report
Figure 1: Definition of different monthly household income groups, by city tier
Excluded
EXECUTIVE SUMMARY
The market
Figure 2: Best- and worst-case forecast of total new passenger car sales volume, China, 2012-22
Figure 3: Best- and worst-case forecast of SUV sales volume, China, 2012-22
Figure 4: Best- and worst-case forecast of basic passenger car sales volume, China, 2012-22
Figure 5: Best- and worst-case forecast of MUV sales volume, China, 2012-22
Companies and brands
Figure 6: Car brand market share, 2015-17
The consumer
Car purchasing plan differs between car owners and first-time buyers
Figure 7: Car purchasing plan, by decision-making stage and car buyer groups, July 2017
Target price increases during the decision-making process
Figure 8: The price range of cars planning to purchase, July 2017 vs July 2016
Figure 9: Target price range, by car purchasing schedule, July 2017
Information channel preference varies at different stages
Figure 10: Online information channel, by car purchasing stage, July 2017
Figure 11: Occasions see auto ads that can be clearly remembered, July 2017
Tier two and three city car buyers are more practical
Figure 12: ‘Very important’ car purchasing influencing factors, by city tier, July 2017
Make test drives more family-oriented
Figure 13: Test drive preference, July 2017
What we think
ISSUES AND INSIGHTS
How has technology reshaped the car purchasing journey?
The facts
The implications
How is the role of cars evolving in China?
The facts
The implications
Figure 14: Greeting light display of MINI Vision concept model
How to differentiate MPV models?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Double-digit growth unlikely to happen again in 2017
SUV model is the only winner
New challenges on the horizon
MARKET SIZE AND FORECAST
Slower growth than 2016
Figure 15: Sales volume and growth rate of total new passenger car market, 2012-17
Market expected to grow at a CAGR of 10.5% till 2022
Figure 16: Best- and worst-case forecast of total new passenger car sales volume, China, 2012-22
MARKET DRIVERS
Vehicle purchase tax discount coming to the end
Phenomenal popularity of SUVs
The support of new energy car sales
Second-hand car market is gaining momentum
Figure 17: Comparison of sales volume of second-hand and new passenger cars, 2010-17
Car sharing is reshaping commuting behaviour, not purchasing
Rebound in confidence level
Growing replacement demand
Buying an extra car for the family
MARKET SEGMENTATION
Struggling basic passenger car market
Figure 18: Best- and worst-case forecast of basic passenger car sales volume, China, 2012-22
MPV market is expected to recover slowly
Figure 19: Best- and worst-case forecast of MUV sales volume, China, 2012-22
SUV sales to hit a record high of 20,000 units in 2020
Figure 20: Best- and worst-case forecast of SUV sales volume, China, 2012-22
KEY PLAYERS – WHAT YOU NEED TO KNOW
Local brands are squeezing the space of Korean brands
S&E strategy
Go premium in products, but down to earth on ads
Spoiler to the market
MARKET SHARE
Top 10 becoming even bigger
Figure 21: Car brand market share, 2015-17
Distinct situation of Korean and Japanese brands
Local brands start to differentiate
COMPETITIVE STRATEGIES
High-end sub-brand
Figure 22: Lynk & Co 01
Figure 23: WEY VV7
S&E strategy
Go autonomous
Figure 24: Definition of level 0-5 autonomy
Down to earth
Figure 25: Land Rover Weibo posts
WHO’S INNOVATING?
Establish self-owned lifestyle media channel
Use VR as an assistant
Figure 26: Registration page of Volvo ‘Jiadao’
Event marketing
Unconventional car sharing
Spoiler to the market
Figure 27: CITY eTAXI
THE CONSUMER – WHAT YOU NEED TO KNOW
First-time car buyers make decisions faster
RMB 20,000 more in budget in the final purchase stage
Brand-owned media channels are critical
Family theme to be added in test drives
CAR PURCHASING SCHEDULE
21% of current car owners are considering buying another car
Figure 28: Car purchasing plan of current car owners, July 2017
First-time car buyers are quicker at decision-making
Figure 29: Car purchasing plan, by decision-making stage and car buyer groups, July 2017
CAR PRICE
RMB 150,000-200,000 remains the most popular price range
Figure 30: The price range of cars planning to purchase, July 2017 vs July 2016
Average target price remains on a high level
Figure 31: Average target price, 2014-17
Target price increases along with the decision-making process
Figure 32: Target price range, by car purchasing schedule, July 2017
ONLINE INFORMATION CHANNEL
Brands’ websites and WeChat accounts are critical in final decision-making
Figure 33: Online information channel, by car purchasing stage, July 2017
Dynamic sorting habits of different car buyer groups
Figure 34: Online information channel, by car buyer groups, July 2017
Tier one city car buyers more likely to go for unconventional channels
Females value social networks more than males
INFLUENCING FACTORS
Tier two and three city car buyers are more practical
Figure 35: ‘Very important’ car purchasing influencing factors, by city tier, July 2017
Luxury car owners value driving experience
Figure 36: Gap between luxury car owners and other car buyers (benchmark) on the claim rates of ‘very important’ influencing factors, July 2017
Technology equipment outweighs word of mouth in the final stage
Figure 37: Claim rates of ‘very important’ on selected factors, by car purchasing stage, July 2017
OUT-OF-HOME MEDIA EXPOSURE
More likely to remember an ad when in a relaxed mood
Figure 38: Occasions see auto ads that can be clearly remembered, July 2017
Target female car buyers at specific occasions
Figure 39: Gap between females and males (as benchmark) on occasions see auto ads that can be clearly remembered, July 2017
Out-of-home ads work better at early car purchasing stage
Figure 40: Numbers of online and out-of-home media channels referred to, by car purchasing stage, July 2017
TEST DRIVE PREFERENCE
Family themes and technologies to be highlighted
Figure 41: Test drive preference, July 2017
Males and females are looking for different test drive activities
Figure 42: Gap between females and males (as benchmark) on test drive preference, July 2017
Prepare adventures for luxury car owners
MEET THE MINTROPOLITANS
Higher (luxury) car ownership
MinTs make a decision faster
Figure 43: Car purchasing schedule in the final decision-making stage, by consumer classification, July 2017
The target car price of MinTs is above RMB 250,000
Figure 44: The price range of cars planning to purchase, by consumer classification, July 2017
MinTs check more information channels than Non-MinTs
Figure 45: Gap between MinTs and non-MinTs (as benchmark) in information channel preference at different stages, July 2017
Car brand matters to MinTs
Figure 46: Gap between MinTs and non-MinTs (as benchmark) on the claim rate of ‘very important’ factors, July 2017
Invest in advertising in airports
Figure 47: Occasions see auto ads that can be clearly remembered, by consumer classification, July 2017
No significant gap between MinTs and Non-MinTs in test drive preference
APPENDIX – MARKET SIZE AND FORECAST
Figure 48: Total sales volume of new passenger cars, 2012-22
APPENDIX – MARKET SEGMENTATION
Figure 49: Total sales volume of SUVs, 2012-22
Figure 50: Total sales volume of MUVs, 2012-22
Figure 51: Total sales volume of basic passenger cars, 2012-22
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Fan chart forecast
Abbreviations