Downturn bodes well for Chinese car makers

Shanghai - The downturn might work to Chinese car manufacturers' advantage if they improve their product quality and build up a consistent brand message, said Klaus Paur (pictured), automotive director, North Asia for TNS.

The latest TNS China Automotive survey revealed almost half (45%) of consumers intending to buy a car have postponed their purchase in the first quarter of this year as they were concerned about the economic slowdown.

However, nearly four out of ten purchase intenders are set to proceed with their purchase plans with those over 30 years old most optimistic as they made up almost half (46%) of those intending to purchase as initially planned.

Paur said car buyers above 30 years old constitute the core consumer group for automotive purchases.

"Most of them have already progressed in their career, and can allocate a decent amount of money for a car purchase," he said.

Paur observed car buyers in China are relatively young compared to matured markets.

This younger group of car buyers around 35 are well-educated, Chinese middle class with good jobs that are interested in trendy and fashionable designs in the small car segments as a way to express their personalities.

Despite growing optimism, the downturn has made car buyers more budget conscious with one in every four future car buyers (23%) intend to scale down their purchase budget.

In response to the downturn, car buyers that mainly consider international brands for their car purchase are now more open to switch to Chinese domestic brands at 44% while 60% of those who consider both international and Chinese brands show an increased preference for domestic cars.

Paur said the leading Chinese auto brands include Chery, Geely and BYD (Build Your Dreams). However, these local brands are challenged by joint venture manufacturers backed up by strong international brands, high product quality and attractive price.

The leading joint venture brands include Volkswagen, Shanghai GM, Toyota and Dongfeng Nissan.

His advice to Chinese auto brands is to build cars with trendy and streamline designs supported by a consistent brand strategy that is in line with marketing activites and brand communications.

He added that Chinese domestic car markers can benefit from the cautious consumer behaviour and postion themselves as attractive alternatives to foreign brands that are better value for money.