With annual growth reaching above 30 percent in recent years, the Chinese auto market is rapidly surpassing the United States’s as the world’s most lucrative and strategically important. In 2010, the Chinese bought over 13.8 million passenger vehicles while Americans bought just 11.6 million. Foreign-origin brands, most of which are manufactured in China through joint ventures, accounted for 64 percent of total Chinese sales in 2010, according to the China Association of Automobile Manufacturers.
“Because the market is so young, brand perceptions and a car’s face” — an idiom meaning prestige or repute — “are both critical,” said Zhang Yu, managing director of Automotive Foresight, a Shanghai industry consultancy. Here are a few of the stereotypes that are impacting sales in China:
Buick – “Hot Stuff”
America’s oldest surviving automobile maker, Buick, has successfully positioned itself in China as a top-tier luxury car maker. Unlike in the US, Buick in China is seen as a producer of some the hottest luxury cars. Some of the interest in the brand is historical: both China’s last emperor and its first provisional president owned Buicks. But its success is far from history: in 2010, the company sold more 550,000 cars in China. “We joke that our market revived Buick from the dead — it’s only partly a joke,” said Liu Wen, a reporter for China Auto News.
Mercedes-Benz – “Mom and Pop’s Car”
If China’s perception of Buick seems to contradict most other nations’, its opinion on Mercedes-Benz is other-worldly. Mercedes, a brand that screams “moneyed respectability” to the rest of the world, has become synonymous with retirement in China. To the young Chinese elite, the M-B cruiser is a snoozer.
Audi AG – “The Bureaucrat’s Choice”
The semi-official choice of Chinese bureaucrats, Audi claimed 20 percent of its Chinese revenue in 2009 from government purchases. The company gained access to China in 1988, when it arrived with its owner, Volkswagen, who struck a deal with Yiqi, a Chinese car maker. Today, the Audi A6 in China exudes state privilege, authority, and (to ordinary folk) a hint of corruption. In 2010, Audi sold 227,938 vehicles in China – it sold less than half that amount in the United States.
BMW – “Affluent and Arrogant”
Consider BMW Audi’s jealous neighbor. Neighbor because of its price proximity — a basic model Audi A6 costs 355,000 renminbi, or $56,000, while the BMW 5 series Li costs about 428,000 renminbi, or $67,520. BMW, like Audi, also has somewhat desultory connotations but none of the government connections. BMW in China is associated with the arrogant and the rash, off-limits to wealthy officials who prefer a low-key public image. Despite all that, the company sold 121,614 units in the first two quarters of 2011.
photo credit: theautochannel