Running head: CHINESE PERSONAL AUTOMOBILE MARKETING ANALYSIS
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Abstract
Now Chinese automobile market is the biggest market in the world. It is a big challenge for
Chinese automobile manufacture to design a good enough marketing strategy to meet the rapid
growth of demand. Guided by customer value-driven marketing strategy, Chinese automobile
manufacturer designs an integrated marketing mix made up of factors under its control—product,
price, place, and promotion. This paper introduces in details how Chinese automobile
manufacturers use the tools of these four Ps.
CHINESE PERSONAL AUTOMOBILE MARKETING ANALYSIS
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Chinese Personal Automobile Marketing Analysis
China became the largest market of cars in 2009, 10.33 million cars were sold in that
year. In only one year from 2008 to 2009, car sales increase 52%. In the same year, there are
50 million cars sold. China accounted for 20% of the global market. After the rapid growth in
2009, the increase slows down. However, Chinese car market is still expanding at a high speed.
To 2016, one of every three cars was sold in China.
As a marketer, we have to think about why the car sale grows such rapid in China. From an
economic perspective, China keeps a high GDP increase these years. Government makes every
effort to improve the people's well-being. More roads and highways are built. Meanwhile, people
are improving their own life. They travel more than before because of the good transport
facilities. There are so many travel methods customers can choose in the market, for example bus
and subway for commute, train and airplane for the long-distance travel. At the beginning, not
that many people want to own a personal car. Gradually, people become tired of standing in the
crowded bus or subway. They begin to pursue more comfortable and more convenience methods
to commute and travel. At this time, they want to own personal cars. After purchasing a personal
car, people won’t be restricted by the routes and timetables of the public transportation any more.
They can schedule their trip and go wherever they want. When backed by buying power, wants
become demands. More and more people notice the benefits they get from personal cars. Their
needs result in the high demand.
PRODUCT
Product is always the most important part in marketing plan. In customers’ mind, foreign
manufacturers are more experienced on design and building cars. Regardless the price, more
customers would like to choose cars built by foreign manufacturers, like Volkswagen and Benz.
CHINESE PERSONAL AUTOMOBILE MARKETING ANALYSIS
In early years, no foreign companies and private companies are allowed to build factories by
themselves in China. To compensate the deficiencies on technology of manufacturing cars,
Chinese manufacturers begin to work with the foreign manufacturers. They shared their
technologies and their factories. Some joint ventures were built. The corporation between
Chinese and foreign manufacturers satisfies customers’ needs. Chinese customers can get
cheaper Benz with the same design and same quality. Chat 1 indicates that there are 7 joint
ventures in Chinese top 10 manufacturers. The big sale on cars from joint ventures proves that
this corporation is a successful marketing strategy.
Chinese customers like cars with larger outlook and larger interior space. Based on this
purchase behaviors and special needs of Chinese customers, joint ventures update some designs
of foreign manufacturers. Volkswagen Lavida is a first try and get a good result. SACI designed
and manufactured the Lavida based on the Volkswagen Group PQ34 platform, which is used on
Volkswagen Jetta. In other words, SACI redesigned the Jetta, increasing the length of car body
and the space of car boot. These changes meet the Chinese customers’ needs successfully. Also,
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CHINESE PERSONAL AUTOMOBILE MARKETING ANALYSIS
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SACI achieve a big success on Lavida. 255 thousand Lavidas’ were sold only in the first half of
2017 and Lavida becomes the sale champion.
PLACE AND PRICE
Customer usually buy from the manufacturers that offer the highest customer-perceived
value. Considered the economic condition of some customers, some local manufacturers offer
some economic personal cars, which are fully designed and manufactured by themselves.
The policy in China also speeds up the expansion of Chinese personal car market. In 2001,
China joined WTO. Imported taxes decrease several times. A new imported taxes deduction
released in May, which will decrease the price of imported personal cars by 10% approximately.
Personal cars become cheap and affordable for Chinese people.
In addition, marketing intermediaries try their best to make personal cars affordable. More
and more dealers offer financial services for customers. Customer that really needs a car can
drive the car away with a little down payment. After that, customer only needs to pay a little bit
monthly. If customer pay on time, no interest will be charged. In US, dealers also provide lease
options, which are not offered yet among Chinese dealers. Under lease agreements, customer can
change a new car every two or three years. This financial option satisfies the needs of some
customers who like new car design and who think the new cars more stable.
PROMOTION
Marketers in Chinese personal car market are pursuing customer value-driven marketing
strategy. They don’t want a customer buy a car before he is sure he like it. Customer can pick up
whichever he likes in the showroom and schedule a test drive. Customer can compare the cars he
tests and make a decision, based on the experiences from test drive and introduction from
salesmen.
CHINESE PERSONAL AUTOMOBILE MARKETING ANALYSIS
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To increase sales, marketers try various kinds of marketing methods. As purchasing online
becomes popular, some manufacturers make attempts. When the new SUV, Levante, from
Maserati, launched in China, the first 100 new models were sold on Taobao, which is the biggest
B2C website in China. Cars sold out in 2 hours. Obviously, many customers would like to try
this new purchase method.
Although a large number of cars were sold in the last several years, the per capita rate of
car ownership is low in China. According to the record of 2016, every 7 people owns one car in
China, ranking 97 in the world. So, China is still a huge potential market. Until now, Chinese
manufacturer’s success contributes to its marketing strategy and high demand. Customers are
always in the center. The manufacturer that loses customers loses the market. To win the battle
with its competitors, Chinese manufacturers should pay more attention on services. It is
manufacturer’s target to provide a better and cheaper post-purchase services.
CHINESE PERSONAL AUTOMOBILE MARKETING ANALYSIS
Reference
Philip Kotler, Gary Armstrong. (2016). Principles of Marketing Global Edition. Pearson
Statista (2017). Car sales (passenger and commercial vehicles) in China from 2008 to 2017 (in
million units). Retrieved from https://www.statista.com/statistics/233743/vehicle-salesin-china/
EU SME Centre (2015). The Automotive Market in China. Beijing: EU SME Centre.
China Association of Automobile Manufacturers (2017). The top 10 manufacturers in the first
half of 2017. Retrieved from
http://www.caam.org.cn/zhengche/20170720/1605210176.html
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