This report looks at the following areas:
- Profile of current vehicle owners by energy type and their future car purchase choices
- Overall purchase considerations and top factors affecting the final purchase decision
- Information channels used, from initial considerations to the final purchase decision
- Attitudes towards car purchasing and activities that encourage purchase
The surge in new models equipped with the latest technology and offering better value for money will drive an increase in options for consumers, while significantly increasing the diversity of purchase considerations at all stages of the decision-making process.
Keiyou Wang, Director, China Insights
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Executive summary
- Key issues covered in this Report
- What you need to know
- Enhance the purchase experience across multiple dimensions
- The market
- Trade-ins drive demand and market liquidity sees a significant improvement
- Graph 1: retail volume sales of passenger cars, 2016-24 (est)
- New energy brands face challenges in transitioning from sprinting to running a marathon
- Marketing activities
- New product trends
- The consumer
- Up to 30% of NEV owners are considering switching back to fuel cars
- Boosting service-oriented smart features is key for premium new energy vehicles to stand out
- Graph 2: winning features in final comparison – current vehicle, by energy type x car price, 2024
- Offline automotive channels can leverage innovations to help brands break through early-stage bottlenecks
- The integration of smartphones and in-car systems holds significant appeal for the post-2000s generation
- Graph 3: attitudes towards car purchasing, by age, 2024
- Innovative marketing activities should focus on synergies between technology + cultural tourism
- Issues and insights
- What we think
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The market
- Market size and forecast
- Demand for trade-ins has been stimulated, but there is a greater possibility of fluctuating volume sales in the next few years
- Graph 4: wholesale volume sales of passenger cars, 2016-24 (est)
- Graph 5: retail volume sales of passenger cars, 2016-24 (est)
- Fluctuations are likely over the next five years
- Overview of market segments
- NEV penetration will remain above 50% in Q2 2024
- Graph 6: share of passenger car volume sales, by energy type, 2018-Nov 2024
- The MPV market is going strong, but breaking through is tough
- Graph 7: share of passenger car retail volume sales, by vehicle type, 2024
- The market share of low-cost fuel vehicles is rapidly shrinking, with Japanese brands being the most affected
- Graph 8: share of car volume sales in each price segment, by energy type, January 2019-October 2024
- Market factors
- Price reductions and subsidy policies are further driving the buzz around the car market
- Iterations in NEV technology drive development, but safety and environmental concerns remain
- An acceleration in new model launches sees a mixed response
- In the era of smart electric vehicles, the demands of female owners are constantly evolving
- Battery swapping is no longer a solo effort, as car companies join the battery leasing alliance
- Impulse buys and delivery delays prompt a rise in cancellations, drawing attention to brand promises
- New one-stop retail models are emerging, promoting full-lifecycle automotive services
- Marketing activities
- Sports events have become popular in marketing, with factory marathons being the most distinctive
- Brands team up with ‘controversial’ public figures, encouraging nuanced thinking about reality TV
- Establish an innovative and globalised brand image through international competitions
- Multifunctional usage occasions define new models, broadening possibilities around automotive lifestyles
- New product trends
- Smart modes linked to usage occasions make vehicles easier to operate
- eHMI technology turns cars into companions
- A new model of smartphone-car connectivity ignites the battle between brand ecosystems
- Health monitoring data is being connected to intelligent safety driving features
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The consumer
- Profile of car owners by energy type
- Over half of vehicles purchased in Tier 1 cities over the past year were NEVs
- Graph 9: energy type, by city tier x time of purchase, 2024
- The growing trend for price reductions affects all energy types, but NEVs are more significantly impacted
- Graph 10: car purchase price, by energy type x time of purchase, 2024
- Graph 11: average purchase price, by energy type x time of purchase, 2024
- The MPV market shows the greatest transition towards new energy models, but has not made a significant breakthrough in terms of market size
- Graph 12: energy type, by car type, 2024
- Graph 13: % share of car type, 2024
- Female car owners actually prefer more spacious vehicles, upending the stereotype that women favour small cars
- Graph 14: car type, by age and gender, 2024
- Future purchase intent
- The expansion of the NEV market into lower-tier cities is expected to go up a gear
- Graph 15: preferred energy type for possible car purchases this year or next year, by city tier, 2024
- The rise of domestic brands is inevitable, tapping into the new energy wave to shake up the market landscape
- Graph 16: current car brand, by city tier, 2024
- Graph 17: preferred car brand nationality if switching, by city tier, 2024
- Up to 30% of NEV owners are considering switching back to fuel cars
- Graph 18: preferred energy type for possible car purchases this year or next year, by energy type of current vehicle and car price, 2024.
- Purchase considerations
- Consumers care most about configuration, while the focus on value for money has somewhat decreased
- Graph 19: purchase factors, 2024
- Graph 20: top three purchase factors for select owner demographics, by time of purchase, 2024
- Competition over value for money is more intense in the traditional fuel car market
- Graph 21: top purchase factor, by energy type, 2024
- Intelligent software and configurations are especially important in the RMB200,000 range
- Graph 22: top three purchase factors for select owner demographics, by purchase price, 2024
- Winning features in final comparison
- Intelligent features triumph in a close-fought battle at the final comparison stage
- Graph 23: winning features in final comparison – current vehicle, 2024
- Interest in assisted driving powers ahead
- Graph 24: winning features in final comparison – current vehicle, by time of purchase, 2024
- A focus on services is key for premium NEVs to break through
- Graph 25: winning features in final comparison – current vehicle, by energy type x car price, 2024
- Information channels used across the purchase process
- Offline automotive channels can leverage innovations to help brands break through early-stage bottlenecks
- Graph 26: car purchasing information channels, ranked by use at initial consideration phase, 2024
- Specialised automotive platforms’ communication with the next generation of young car owners at the initial consideration stage is under par
- Graph 27: car purchasing information channels – initial considerations (a), 2024
- BEV owners place more emphasis on emotional communication in the final decision-making stage
- Graph 28: car purchasing information channels – final decision (a), 2024
- Attitudes towards car purchasing
- Free from the pressure to keep up appearances, willingness to enhance experiences and embrace innovation is rising
- Graph 29: attitudes towards car purchasing, 2024
- Lower-tier cities have higher demands for durability and multi-passenger travel
- Graph 30: attitudes towards car purchasing, by city tier, 2024
- The appeal of new business models, such as battery leasing schemes and the integration of smartphones with in-car systems, cannot be underestimated
- Graph 31: attitudes towards car purchasing, by age, 2024
- Consumers with higher demands for innovative designs and technologies are more likely to choose domestic brands
- Graph 32: attitudes towards car purchasing, by preferred car brand nationality if switching, 2024
- Activities that promote purchase
- Innovative automotive events can emphasise synergies with technology + cultural tourism
- Graph 33: activities that promote purchase, 2024
- Introduce premium occasion-based marketing to more precisely attract potential premium customers
- Graph 34: activities that promote purchase, by purchase price, 2024
- Daring challenges are more likely to go viral among younger consumers
- Graph 35: activities that promote purchase, by age, 2024
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Issues and insights
- Explore the emotional value of cars as a companion, doctor and assistant
- Rethink car ownership; the battery leasing model gains attention
- Strengthen the value of brand ecosystems and combine technology with tourism to offer user-only privileges
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Appendix – methodology and abbreviations
- Methodology
- Abbreviations
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