The BCG study found that as many as three-quarters of Chinese car owners plan to change brands when they change cars. The latest report from BCG reveals that in the face of the upcoming "brand migration" wave, domestic and foreign auto companies must firmly grasp China's current 90 million multipliers. Loyalty of car and light car owners Beijing, September 17, 2014 - The Boston Consulting Group (BCG) released its latest report, "The Brand Loyalty: The Next Battle of the Chinese Auto Market." The report pointed out that the Chinese auto market is entering a new and important stage of development. Whether domestic and foreign auto companies can succeed in the Chinese market will depend on their ability to firmly grasp customer loyalty. According to the survey, as many as three-quarters of Chinese car owners plan to change brands when they buy the next car, and the total number of cars owned by these owners is estimated to be more than 90 million. Vegetable Pretreatment Equipment Freeze Dry Machine,Freeze Production Line,Fruit Quick Freeze Production Line,Vegetable Pretreatment Equipment Dalian Iceberg Freeze-dry Technology Co.,Ltd , https://www.freezedrydliceberg.com
The report found that this wave of “big brand migration†will affect the various segments of the Chinese auto market. In the relatively low-priced self-owned brand car market, nearly 85% of car owners indicated that they intend to change brands when purchasing the next car, of which only about 30% said they plan to purchase other independent brand products. Foreign mid-range brands (between RMB 80,000 and RMB 250,000) may lose 70% of current customers. In the premium car market dominated by several European high-end brands, about 57% of car owners plan to change brands.
Among each of the above brand types, the loyalty level of Chinese consumers is lower than that of developed market owners in similar surveys. The findings of this report are based on interviews with 2,400 car owners in the Chinese market by the BCG Consumer Insights Think Tank (CCCI).
Marco Gerrits, BCG partner and Greater China Automotive Specialist, said: “China is the world's largest market for the automotive industry. Many auto companies still focus on winning first-time buyers today. Both domestic brands and foreign brands need to change their minds in the future. Our research shows that a new round of competition in the Chinese auto market will focus on customer loyalty."
According to BCG research, some brands seem to be expected to become big winners in the Chinese auto market. About 40% of self-owned brand owners who plan to upgrade their consumption to foreign mid-range brands are planning to purchase Volkswagen brand cars. Nearly 90% of foreign mid-range brand owners who plan to upgrade to high-end brands are likely to choose Audi, BMW or Mercedes.
Jin Weidong, senior partner of BCG and a core member of the automobile industry, pointed out: “Chinese consumers mostly choose a few well-known brands when they buy cars, because these brands make them feel no worries. In this case, the competition in the Chinese auto market The pattern is increasingly showing the characteristics of 'winners take all', which makes it more necessary for auto companies to win this brand competition."
The survey results show that Chinese car owners have a variety of reasons for changing brands. As Chinese consumers become more affluent, many people want to upgrade to better or higher-end brands when they are affordable. This report refers to these owners as “consumer upgradersâ€. Millions of other consumers are known as "brand changers": they are not satisfied with many aspects of existing vehicles, so they plan to change brands in the same car segment.
In most market segments, consumer upgraders and brand changers have different expectations for the next car to be purchased. According to BCG research, in the self-owned brands, foreign mid-range brands and high-end brand markets, there is also a great difference in the functional and emotional needs that Chinese car owners fail to meet.
Pursuing better product quality, performance and dealer experience is the biggest reason for owners of their own brands to change brands. Hema said: "The most pressing challenge for independent brands is to continuously improve automotive products and improve dealer services while maintaining their own cost advantages."
Concerns about product reliability, safety and high maintenance costs are the primary reasons why mid-range brand owners are planning to switch to competitor brands in the same segment. Mid-range brand owners who plan to upgrade their consumption hope to have better configuration, higher-end after-sales service and automotive products that can reflect higher social status. Among high-end car owners, brand changers mainly want higher ride comfort and better after-sales service, while consumer upgraders mainly expect more luxury experience.
Andreas Klotz, one of the report's authors and BCG project manager, said: “Companies need to know clearly which functional and emotional factors are driving purchase decisions from different customer segments in the Chinese automotive market. Companies should also establish more distinctive brand identity. - But most of the current car brands in the Chinese market are far from achieving this goal."