Warc, 18 September 2014
BEIJING: Three-quarters of Chinese car owners, representing
a huge market of 90m vehicles, are prepared to switch brands and they are
focusing on just a few marques that have built a good reputation for
reliability, a new survey has revealed.
According to a poll of 2,400 Chinese car owners by the
Boston Consulting Group's Center for Consumer and Customer Insight, nearly 85%
of those owning Chinese auto brands say they plan to switch.
But foreign brands can also expect to be affected because
70% of consumers owning foreign "volume" cars – defined as costing
between $13,000 and $41,000 – intend to switch, while 57% of foreign premium
car owners plan to do the same.
This "great brand migration" will affect every
segment of China's auto market, the report warned, and securing customer
loyalty will be essential.
Marco Gerrits, the head of BCG's automotive sector in
Greater China, said that many automakers had focused on winning over first-time
buyers, but now both Chinese and foreign brands should not take their gains for
granted.
"These findings suggest that the next great battle in
China's car market will be waged over customer loyalty," he predicted.
But a handful of foreign brands – all of them German – stand
to benefit from this customer loyalty volatility.
Among those consumers who plan to trade up their Chinese-built
volume car to a foreign volume brand, 40% say they intend to buy a Volkswagen
model.
And nearly 90% of those who own a foreign volume brand car
say they are likely to buy an Audi, BMW or Mercedes-Benz.
"The stakes are particularly high in China because it
tends to be a winner-take-all market," said Donald Zhang, a BCG project
leader and co-author of the report.
"Chinese car buyers seem to be converging on a handful
of brands that have solid reputations for being safe choices," he added.
Data sourced from BCG; additional content by Warc staff
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