Nielsen went “under the hood” in China, the world’s leading automotive market, to survey and to better understand what Chinese consumers want when they shop for a new car. The survey reveals that today’s Chinese car buyer is more demanding in terms of what qualities and features they want. The most important factor attracting Chinese car buyers’ attention is the exterior design (25%) and vehicle performance (22%), significantly higher than the third and fourth priorities of interior (4%) and price (3%).
A new generation of car buyers
The next decade’s growth in the automotive sector is expected to be driven by consumers born in the 1980s and 1990s. These young buyers have different priorities when it comes to choosing a car. While car buyers born in the 1960s and 1970s set emphasis on the car’s brand image, its function and the purpose for which the car will be used, the new generation of buyers view cars as expressions of their identity and personality, making the car’s exterior styling a priority. The top purchase criteria in choosing a car for the generation born in the 1990s is safety (54%), followed by exterior design (47%), price (39%) and quality (38%).
Now is the time for car companies to begin a dialogue with this generation, listen to their ideas and better understand their needs and motivations. The first mover has the opportunity to get ahead of would-be followers.
With environmental awareness rising along with higher oil prices in recent years, more Chinese consumers are considering buying electric vehicles (EV), with a purchase intention of more than 50 percent. Compared to two years ago, consumers are willing to spend more for electric cars, and more than half (52%) of consumers are willing to pay a higher price for pure EVs, with a mean premium of 24,763 CNY, much higher than the 2009 level of 10,000 CNY. Consumers in Tier 1 cities such as Shanghai are willing to pay even more for EVs, 32,000 CNY on average.
The key audience for electronic vehicle manufacturers should be trend-driven consumers, who are looking for a unique model and are willing to sacrifice some cost efficiency for a green cause. Meanwhile, EV manufacturers should apply a differentiated marketing strategy combined with a novel approach to help convert the trendsetters into early adopters, who will in turn lead the market and contribute to the development of the industry’s latest selling point.
Compared with dual-clutch automatic transmissions and fuel injection technology, turbocharged engines have the greatest name recognition of technical features, and they are a first priority purchase option for 87 percent of consumers considering a car purchase.
Turbocharged engines attract the more sophisticated automotive consumer: consumer awareness and willingness to buy turbocharged engines are much higher among the medium- to high-price car consumers (priced 120,000 to 300,000RMB) than the economy car consumers. The number of car models equipped with turbocharged engines is very limited in the Chinese market so the high demand of the more sophisticated automotive consumer is far from satisfied.
Of major interest and purchase consideration are telematics (GPS, on-board navigation), with 58 percent of consumers ranking telematics as their top consideration. Pre-collision safety (36%) and night vision system (37%) also registered strong interest among all generations of car buyers.
Leveraging social media to connect with consumers
To hear what Chinese consumers are saying about cars, Nielsen monitored e-forums and the social networking site Weibo. Social media in China has boomed, attracting millions of users and the interest of marketers who seek to use it to connect with current and potential customers. Based on Nielsen’s analysis price (39%) was the most discussed issue, followed by efficiency (36%).
Steven Li, CEO of China Nielsen Online Division, suggested that car manufacturers strengthen their online presence to better connect with potential buyers help them win word-of-mouth. Li outlines four classic types of online car consumers:
- Potential buyers, who have no clear models in mind and are seeking information and viewpoints to help them in their decision
- Potential buyers who have a clear model in mind
- Those who have newly purchased vehicles
- Grass-roots automobile experts
Consumers’ spontaneous comments about cars, whether they are positive or negative, can play an important role in purchase decisions, and car brands need to know how to engage consumers, particularly on social media.
Georgia Zhuang, Vice President, Client Solutions, Nielsen China