Bizchina
Carmakers to vie for repeat customers
By Tian Ying and Stephanie Wong (China Daily)
Updated: 2010-03-11 10:40
 |
Large Medium Small |
|
 |
|
A model poses in front of a car produced by Shanghai GM at an auto show in Shanghai. Am Xin / China Daily |
BEIJING - After 8.6 million Chinese bought their first cars last year, General Motors Co, Volkswagen AG and Ford Motor Co are positioning themselves to compete for return customers.
The number of car models in China's showrooms quadrupled in the past six years, forcing companies to fight for attention by unveiling vehicles at the Imperial Ancestral Temple in Beijing and the Great Wall outside the capital - and by paying Olympic gold medalist Michael Phelps millions of dollars.
"It is clear that brands are still in the forming process," said Joerg Mull, chief financial officer for Volkswagen AG's China unit. "One of the keys for success in China in the long run is brand building and brand establishment."
About 83 percent of Chinese buyers last year purchased their first vehicle, said the State Information Center, a research arm of the government's National Development and Reform Commission.
At stake for China's more than 130 carmakers is winning loyal customers in world's largest automobile market.
Sales in the country surged 46 percent to 13.6 million last year, according to the China Association of Automobile Manufacturers. In the US, sales slumped 21 percent to 10.4 million, the fewest since 1982, according to Autodata Corp.
This year, sales in China may rise more than 10 percent to about 15 million vehicles, Chang Xiaocun, head of the Ministry of Commerce's market construction department, said. Customers choose from 221 models, more than double the total of 2008 and more than quadruple that of 2004, the manufacturers association said.
"You've got to create the right image, you've got to market it aggressively," General Motors' China President Kevin Wale said after the company and Chinese partner SAIC Motor Corp launched their Buick Excelle XT in Shanghai.
| |||
Car buyers in China tend to be younger than those in the US, Wale said, so the Internet is a key part of an automaker's marketing strategy. The average Buick customer in China is 28, married and a college graduate. His US counterpart is 66 and doesn't have a degree, General Motors China said.
China is the world's largest Web market with 396 million users last year, according to New York-based EMarketer Inc. That number will grow to 840 million, or 61 percent of the country's population, by 2013, EMarketer forecasted.
"Chinese consumers are really Internet savvy," said Nigel Harris, general manager of Ford's venture with Chongqing Changan Automobile Co, which is increasing its marketing spending by more than 10 percent.
"They talk to each other through the Internet. Word of mouth is really critical in this market."
Companies place ads on social networking sites and use billboards and posters that redirect 3G phones to websites when photographed, Harris said.
GM's partnership spent 10.99 million yuan ($1.61 million) on online advertising in December, the most among car companies, according to IResearch Consulting Group, a Beijing-based organization studying customer behavior in Internet media. Its "more energetic" campaign of Web videos, pop-ups and banners targets consumers 25 to 40 years old, Wale said.
FAW-Volkswagen Automobile Co, a joint venture involving Changchun-based China FAW Group Corp. and Volkswagen, of Wolfsburg, Germany, came in second, spending 10.81 million yuan.
Bloomberg News?
