China, the most populous country in the world, is always a critical market for auto makers. In spite of the fact that its economy is slowing down, many people are still bullish about the potential of auto sales in the country because of the increase of middle class, as well as the government’s goal of boosting domestic consumption for economic growth.
Both domestic and foreign auto makers displayed their latest (probably coolest as well) cars along with gorgeous models to attract potential buyers’ attention at this week’s Beijing auto show, and many of them are really ambitious about their China business. For instance, Toyota Motor Corp., the world’s largest auto maker by sales, aims to take the third spot in the country in terms of market share by bringing 15 new car models to Chinese consumers by 2017 and doubling its sales to two million cars over the long run. Similarly, Volvo Car Corp. said it expects China to overtake the U.S. and become its biggest market this year based on a statement issued Sunday, in which the Swedish company said it sees sales of at least 80,000 in China, up from 61,146 in 2013.
So what kind of strategies are auto makers adopting for sales growth? In my observation, the top three concepts are branding, patriotism, and youth-targeted design.
First, branding is essential for every single auto maker. Most buyers in China are not industry experts and cannot tell the difference between two similar-level cars based on technical factors. Therefore, what really helps a particular auto maker stands out is branding. Simply speaking, manufacturers have to think how to make their cars look both reliable and fancy to consumers, instead of being overwhelmingly focused on technical excellence.
Second, patriotism can be an effective selling point of domestic brands. Makers like Geely Motor Corp. and Great Wall Motor Corp. are trying to persuade buyers, especially those elders, to remain loyalty to Chinese brands. However, I think those domestic manufacturers have to increase quality and enhance industry structure to stimulate sales radically.
Third, youth-targeted design is emerging to be a dominant theme. Unlike many Americans under 30 who are burdened with college debts or wrestling with a sluggish job market, China’s young consumers have “incredible resources”, which is derived from the one-child policy in the country. As a result, many top auto makers like Mercedes-Benz showcased what they described as sport-utility vehicle coupes — SUVs with fast-looking roof lines that look to be borrowed from a sports car to attract young buyers.
In conclusion, I think there is not a best strategy for all auto makers, and they have to target the right buyers based on their unique selling points such as design, price, momentum, etc.