Late Comers in the China Automobile Market to Benefit Hugely in the Long Run

Published Date : May 05, 2015

Automobile brands such as Jaguar, Fiat, and Renault have entered quite late into the China automobiles market. This is one of the main factors that is making it difficult for these car brands to get established in the China market, which at present is in the economic doldrums. However, industry experts are stating that amidst all the economic issues and slowdown problems there are reasons for these car manufacturers to be positive and hopeful since most Chinese buyers exhibit very low degree of brand loyalty. This indicates that they are generally willing to try out newer brands in the market and are open to change. 

According to the Boston Consulting Group that conducted a study that took into account the purchasing habits and purchasing trends of almost 2400 vehicle owners, concluded that almost 3/4ths of the buyers population had plans of brand switching while purchasing their next car. According to a senior official at BCGs automobile practice that is taking place in the area of Greater China has described this as “the great brand migration”. Also, he has given a rather simple advice to most car manufacturers. 

With a shift of focus from profits to the aspect of aftermarket services, these manufacturers should ideally stop giving too much of importance to launching newer vehicle models in the market. And the companies should focus more on capacity expansion and increasing the total number of dealer bodies and also give substantial importance to the area of value chain structure which will see companies interacting directly with customers and also bring about a high degree of customer loyalty. What the companies must also focus on is building on the businesses’ downstream side.