Three out of four Chinese car owners say they intend to switch brands when they make their next car purchase, posing both a risk and opportunity for U.S. automakers who have huge stakes there, a new study finds.
The Boston Consulting Group projects that owners of 90 million vehicles will trade up to luxury vehicles or are just plain unhappy with their current set of wheels.
The BCG study points to marked change in the world’s hottest car market.
“Until now, many carmakers have focused on winning over first-time buyers,” says Marco Gerrits, the BCG partner who heads the Chinese auto group, in a statement. “These findings suggest the next great battle in China’s car market will be waged over customer loyalty.”
The big beneficiaries will likely be German companies. The BCG study finds 40% of those who plan to trade away from domestic brands are interested in Volkswagens. Three German luxury makers — Audi, BMW and Mercedes-Benz — are likely to draw sales from 90% of those looking to enter the premium segment.
That presents trouble for General Motors, which has worked hard to build its luxury presence in China with its Cadillac brand. Ford is entering the market with Lincoln.
When it comes to the reasons for their dissatisfaction, Chinese car owners differ depending on whether they are driving a Chinese brand or foreign car.
The nearly 85% of owners of Chinese brands says quality, performance and dealer experience are top reasons for wanting to switch, according to the study. Only 30% say they intend to buy another Chinese brand. Of the 70% of those driving foreign nameplates, the top reasons are reliability, safety and maintenance costs.
Read more at USA Today.