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Car Purchasing Process - China - October 2017

“The decision-making process of affluent 25-29-year-old first-time car buyers lasts for less than three months. They are more willing to gather information from social networks and other unauthentic channels like livestreaming apps and second-hand car platforms than other car buyers. But to convince them, brands’ official websites and WeChat accounts are critical. They look for lifestyle-reflective technical features (both the feature itself and the method of demonstration) from these platforms and during test drive events.”
– Aaron Guo, Senior Analyst, China

This Report looks at the following areas:

  • How has technology reshaped the car purchasing journey?
  • How is the role of cars evolving in China?
  • How to differentiate MPV models?

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Table of contents

  1. 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

                                                                                              Companies Covered

                                                                                              To learn more about the companies covered in this report please contact us.

                                                                                              Car Purchasing Process - China - October 2017

                                                                                              US $3,990.00 (Excl.Tax)