As a passionate automotive researcher born and bred in Europe, China is quite simply paradise for me. However, even as an expert on the subject, I realize it can be sometimes difficult to grasp the true nature and state of China’s development. The rapid growth of the most important industry in the Middle Kingdom is both a complex and exciting subject – one I look forward to developing and exchanging opinions via this dedicated blog.
When I came to China 4 years ago, one of my most amazing discoveries was the existence of a huge number of Chinese auto manufacturers – widely unknown outside of the country. At this time, some of them had already begun to produce passenger cars in Joint Venture cooperation with foreign partners, while only a few had begun pursuing their own route in car manufacturing and establishing their own brands.
Since then, Chinese originated car brands have made astonishing progress - the rising market share of China’s passenger car market leaves no doubt as to the credibility of this statement. However, a closer look at the situation on the ground reveals that Chinese branded car buyers tend to look for affordable products and low prices above all during the purchase process. Brand is simply not the determining factor. But, does this mean the car brand is not a matter of importance for Chinese car buyers?
With an increasingly demanding clientele in this rapidly maturing domestic economy, brand certainly is important! In a competitive environment with functional aspects becoming more and more interchangeable, consumers in the Chinese market still focus on functional features, but little by little are shifting towards more emotional needs. This is where the brand truly gains importance – whatever the origin of the product! Today in China, car ownership itself is a status symbol, an expression of economic success – even if one drives a small Chinese branded car. But this scenario is due to change.
For those Chinese car manufacturers with export ambitions towards developed markets, the “brand” is the entry ticket. Interestingly enough, consumers abroad perceive Chinese brands more favorably than Chinese consumers themselves! A recent TNS survey revealed that US consumers attribute Chinese car brands a competitive edge in value for money and fuel economy while car owners “at home” only see the price advantage and appear much more critical regarding the technological capabilities. However, there is common agreement that basic consumer requirements, such as safety and workmanship cannot yet match the standard of foreign car makers.
It is never too early to explore the value of brands, but with these obvious product quality deficits, do you think domestic car makers should be given more time to improve their manufacturing capabilities? In this sense, Chery’s move to produce Chrylser-badged vehicles appears to be a smart one, in terms of gaining experience and reducing their own marketing risks. Don’t you think?
