Market Research on Cars in China
China` spectacular economic growth over the past 20 years has been reflected in the emergence of the world`s fastest growing consumer market and a vibrant, burgeoning middle class. As incomes in China have risen, Chinese consumers` interest in products that were previously out of their reach, for example cars, has been steadily growing. In 2013, market research on cars in China showed that car sales in China exceeded 22 million vehicles and this figure made China the first country to sell more than 20 million vehicles.
China’s Cars market are slowing down but remains world leader
Although China`s automotive market growth is cooling down, it is still expected to reach 31 million new registrations in 2020 with a much higher annual increasing rate than other economies in the world. It is not surprising that car manufacturers are placing China at the very center of their long-term growth strategies. Currently, Volkswagen is the undisputed sales leader. However, within the market, there are segments that are still expanding much faster, most notably luxury car sales that are aimed at China’s ballooning army of super-rich people. According to a market research on cars in China from BBC News, the luxury car market has enjoyed a growth rate around 37%.
Along the path to be mature, there are still plenty of opportunities for other local foreign auto manufactures to capture market share. The sheer expanse of its geography, the complexity of its sales channels and the rapid pace of urbanization create chances in 150+ cities in China. Considering market divisions and product distributions, car manufacturers need to address a diverse mix of values to influence consumers` buying decisions.
Market research on the future trend for cars in China
There are several trends for automotive market in China in the next decade. First, sales of sport utility vehicles (SUVs) will triple, although sedans will remain the largest segment. Second, there will be more second-time buyers and they will buy more high-priced cars. Third, the volatile growth rates for new cars observed over the last two decades are likely to continue. What is more, consumer behavior by region and car-model preference will vary greatly
China` economy is expected to continue to grow at 7% to 8% yearly in the next 10 year. And the number of high-income urban households earning over 80,000 RMB a year will expand to 58% of the population in 2020. Higher incomes plus low auto penetration now suggest that the market is far from saturation. The expansion of road systems will continue to stimulate consumers` expectation of self-driven journeys and thus, the demand for automotive.
Consumer research and behavioral research will lead the market to keep growing
Nevertheless, regardless of the expected development, car manufacturers and dealers should not ignore that the volatility in Chinese car market, combined with chronic overcapacity, has brought challenges to doing business in China. Car manufacturers should put more emphasis on understanding consumers` needs and behaviors, for example, increasing weight on quality and safety. Recent Accenture research shows that Chinese consumers rely predominantly on four factors when buying cars: friends and colleagues (49%), family members (64%), manufacturer websites (53%) and social media (72%). A suggestion could be that auto manufacturers and deals turn their investment on TV to strong social media sites for further branding.
Global manufacturers will keep on investing in China regardless of the debate and content themselves that half a loaf is better than none, especially when the loaf is much bigger than that in other markets.