China Car Owners In Lower Tier Cities Market Report 2021
£ 3,695 (Excl.Tax)
Report Summary
Providing the most comprehensive and up-to-date information and analysis of the China Car Owners in Lower Tier Cities market, including the behaviours, preferences and habits of the consumer.
Car owners in lower tier cities have very different attitudes when it comes to cars than consumers in Tier 1 and 2 cities, such as towards car purchasing and appearance. Those who live in lower-tier cities tend to have shorter commuting distances and a constant travel route, meaning that they have a unique insight into preferences for the energy type of their car, as well as safety functions and aftersales channels.
As cars become more affordable, they have steadily become less of a status symbol and more of a practical space. Cars are a mobile personal space, allowing you to connect while also satisfying daily travel needs. Cars have also become an opportunity to show off individual fashion tastes, and a space to bond with friends and family.
In order to penetrate the lower-tier market, car brands must understand the differences between consumers in higher and lower tiers, such as their driving and travelling characteristics. By tailoring products and services towards the lower-tier market, they will have the opportunity to gain the trust of car owners in these cities and tap into underutilised markets.
Read on to discover more details or take a look at all of our China Automotive market research.
Quickly understand
- The evolution of attitudes towards cars.
- Information influence.
- Car function preferences.
- Car retailing.
- Car aftermarket.
- Acceptance of new energy cars.
Covered in this report
Brands: NIO, Volkswagen, Honda, BYD, Dongfeng Nissan, Baojun, Buik, Geely, Chevrolet, Renault, Volvo, Hozon Auto, Xiaopeng, Tesla, Tuhu.cn, I-Mechanic.
Expert analysis from a specialist in the field
Written by Austin Yuan, a leading analyst in the Automotive sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
Although consumer demonstrate practical-oriented preferences when it comes to decision-making and aftersales channels, car owners in lower tier cities are more keen to learn about cutting-edge technology and show higher acceptance of new energy cars. This is also due to the fact that they are more interested in presenting their own style and personality while paying attention to basic features. Also, they want to enhance interpersonal and emotional communication by sharing more topics related to cars with family and friends and adding more in-car interaction scenarios. In terms of aftersales, it is important to develop configurations and functions that meet the needs of car owners in lower tier cities and provide professional and reliable maintenance & repair services. Auto brands can also expand and innovate in aftersales and maintenance solutions with new technology or platforms.
Austin Yuan
Research Analyst
Table of Contents
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Overview
- Introduction
- Key issues in this Report
- Objective and methodology
- Quantitative research methodology
- Figure 1: Sample structure for each city as shown below:
- Qualitative research methodology
- Figure 2: Interviewing cities in qualitative research
- Figure 3: Profiles of respondents to the qualitative research
- Introduction
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Executive Summary
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- The evolution of attitudes towards car purchasing: practicality and self-expression need to go hand in hand
- Figure 4: Meaning of car ownership (by city tier), October 2019
- Information influence: a strong desire to learn about cutting-edge auto technology
- Figure 5: Interest in content (by city tier), December 2019
- Car function preferences: focus on the convenience of safety assistance technology, to achieve habitual dependency
- Figure 6: Interest in-car accessories (by city tier), May 2020
- Car retailing: offline channels and customization service for additional functions have evident advantages
- Figure 7: Original channels for price consulting (by city tier), March 2020
- Car aftersales: a blend of brand trust and people trust
- Figure 8: Satisfaction level with maintenance & repair shops (by city tier), July 2019
- New energy car acceptance: great influence of regional policies and trends
- Figure 9: Willingness to purchase new energy cars (by city tier), February 2019
- What we think
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Introduction to Lower Tier Cities in China
- Population size and consumption capacity in lower tier cities
- The increasing scale and proportion of consumption size in Tier 3 or lower cities
- Figure 10: City population and consumption size (by city tier), the end of 2018
- Growth of disposable income and consumption capacity per capita
- Figure 11: Per capita salary vs per capita retail sales of consumer goods (by city tier), 2018
- Spending confidence since the COVID-19
- Figure 12: GDP portion of the sectors (by city tier), the whole year of 2018
- Figure 13: Change in financial status, the percentage of respondents that claimed to be “better off” (by city tier), April-July 2020
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- Figure 14: Confidence in improving future finances, very confident – Somewhat confident (by city tier), April-July 2020
- Consumer population structure overview
- Gaps between city tiers narrowing in education
- Figure 15: Educational levels of surveyed respondents, 2017-June 2020
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- Figure 16: Car ownership and gym membership (by city tier), 2017-June 2020
- How consumers rein in spending on car purchasing
- Figure 17: How to control spending – First choice (by city tier), June 2020
- Population size and consumption capacity in lower tier cities
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The Consumer
- The evolution of attitudes towards car purchasing: practicality and self-expression need to go hand in hand
- What differences do quantitative data suggest?
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- Figure 18: Meaning of car ownership (by city tier), October 2019
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- Figure 19: Attitudes toward the car as a unique self-contained space for relaxation – Strongly agree + agree (by city tier), October 2019
- What explanation does qualitative research suggest?
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- Figure 20: Excerpts of interviews related to space requirements
- Usage cost is an important factor in considerations around cost-efficiency
- Figure 21: Excerpts of interviews related to usage cost considerations
- What it means for brands?
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- Figure 22: Morphoz electric concept car (official image), 2020
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- Figure 23: Dongfeng AEOLUS GS, 2020
- The evolution of attitudes towards car purchasing: practicality and self-expression need to go hand in hand
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Information Influence: A Strong Desire to Learn about Cutting-edge Auto Technology
- What differences do quantitative data suggest?
- Want to learn more about new car models and cutting-edge technology
- Figure 24: Interest in content (by city tier), December 2019
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- Figure 25: KOLs’ influence on car purchasing considerations, December 2019
- What explanation does qualitative research suggest?
- The assessment results from an authority are more easily to gain trust from consumers
- Figure 26: Excerpts of interviews related to authorities
- Eager to get latest information from auto KOLs
- Figure 27: Excerpts of interviews related to auto KOLs
- What it means for brands?
- Improve content quality and add consumer touchpoints
- Case study: the “triplets of promoting products” brought immersive live streaming to promote NIO ES6
- Figure 28: Scenes of live streaming session by Bin Li, Han Wang and Rui Li to promote cars, 2020
- Case study: Dongfeng Nissan had a cloud dinner with 10 million car owners during the pandemic
- Figure 29: Dongfeng Nissan Cloud Family Dinner Livestreaming, 2020
- What differences do quantitative data suggest?
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Auto Features Preferences: Focus on the Convenience of Safety Assistance Technology, Making It Easier to Have Habitual Dependency
- What differences do quantitative data suggest?
- Active security configuration is most popular
- Figure 30: Interest in-car accessories (by city tier), December 2020
- Increased awareness of in-car safety and health
- Figure 31: Initially installed and retrofitted car functions (by city tier), May 2020
- What explanation does qualitative research suggest?
- Figure 32: Excerpts of interviews related to the increasing need for safety aid systems
- What it means for brands?
- Considerate configurations guarantee safe travels
- Case study: Hozon U introduces the “transparent A-pillar” option to solve the pain point of blind spots
- Figure 33: “Transparent A-pillar” by Hozon Auto, 2020
- Case study: all Volvo models are equipped with the ACC dual air purification system
- Figure 34: Volvo ACC air purification system, 2020
- What differences do quantitative data suggest?
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Car Retailing: The Evident Advantages of Offline Channels and Customization Service for Additional Functions
- What differences does quantitative data suggest?
- Offline channels are still the main pricing information channels
- Figure 35: Original channels for price consulting (by city tier), March 2020
- A vast market for customization service for additional functions
- Figure 36: What could be done better by offline car dealers, March 2020
- What explanation does qualitative research suggest?
- Customization services for additional functions meet diverse consumer needs
- Figure 37: Excerpts of interviews related to needs on customization service for additional functions
- What it means for brands?
- Be sensitive to consumer needs and develop consumer usage habits
- Case study: Xiaopeng P7 introduced the additional service of power liftgates which makes it easy for female car owners to open or close a liftgate
- Figure 38: Xiaopeng P7 with power tailgate, 2020
- Case study: Tesla launches ‘dog friendly mode’ for dog owners
- Figure 39: Tesla “pet dog mode”, 2020
- What differences does quantitative data suggest?
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Car Aftersales: A Blend of Brand Trust and People Trust
- What differences does quantitative data suggest?
- The advantages of independent auto shops are obvious
- Figure 40: Satisfaction level of maintenance & repair shops, by city tier, July 2019
- There is some market space for online platforms
- Figure 41: Selected attitudes towards maintenance & repair, by city tier, July 2019
- What explanation does qualitative research suggest?
- Choosing 4S stores results from trust in professionalism and quality
- Figure 42: Excerpt of interviews related to trust in the professionalism and quality of 4S stores
- Figure 43: Excerpts of interviews related to trust in auto shops because of acquaintances
- What it means for brands?
- Build a repair and maintenance concept that consumers trust and grasp the initiative in the car aftermarket
- Case study: I-Mechanic app facilitates self-repair
- Figure 44: I-Mechanicar App, 2020
- Case study: Tuhu.cn launched Full Cloud Support Engine to drive the digital transformation of car aftermarket
- Figure 45: Door-to-door car pick-up and drop-off service by Tuhu.cn, 2020
- Figure 46: Tuhu.cn live streaming interface
- What differences does quantitative data suggest?
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New Energy Vehicle Acceptance: The Significant Influence of Regional Policies and Trends
- What differences does quantitative data suggest?
- The recognition of new energy vehicles stems from the rigid demand for short-distance commuting
- Figure 47: Willingness to purchase new energy cars (by city tier), February 2019
- The usage cost is the biggest advantage of new energy cars
- Figure 48: Purchasing motivations (by city tier), March 2019
- What explanation does qualitative research suggest?
- Low value preservation rate and high maintenance costs are a concern
- Figure 49: Excerpts of interviews related to concerns about low value preservation rate and high maintenance cost of new energy cars
- Energy cost is a major factor in the acceptance of new energy cars
- Figure 50: Excerpts of interviews related to the usage cost of new energy cars considerations
- Free charging policy in Liuzhou, Guangxi
- Figure 51: New energy cars on the street in Liuzhou
- What it means for brands?
- Marketing practices tailored to high maintenance cost
- Case study: BYD introduced a lifetime warranty service for electric chips
- Figure 52: BYD new energy flagship car Han EV, 2020
- Case study: Tesla Model S introduces a value-for-money repeat purchase service
- Figure 53: Tesla Model S, 2020
- What differences does quantitative data suggest?
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Appendix – Abbreviations
- Abbreviations
- Abbreviations
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