Nielsen went “under the hood” in China, the world’s leading automotive market, to survey and to better understand what Chinese consumers want when they shop for a new car. The survey reveals that today’s Chinese car buyer is more demanding in terms of what qualities and features they want. The most important factor attracting Chinese car buyers’ attention is the exterior design (25%) and vehicle performance (22%), significantly higher than the third and fourth priorities of interior (4%) and price (3%).

A new generation of car buyers
The next decade’s growth in the automotive sector is expected to be driven by consumers born in the 1980s and 1990s. These young buyers have different priorities when it comes to choosing a car. While car buyers born in the 1960s and 1970s set emphasis on the car’s brand image, its function and the purpose for which the car will be used, the new generation of buyers view cars as expressions of their identity and personality, making the car’s exterior styling a priority. The top purchase criteria in choosing a car for the generation born in the 1990s is safety (54%), followed by exterior design (47%), price (39%) and quality (38%).

Now is the time for car companies to begin a dialogue with this generation, listen to their ideas and better understand their needs and motivations. The first mover has the opportunity to get ahead of would-be followers.

Electric vehicles
With environmental awareness rising along with higher oil prices in recent years, more Chinese consumers are considering buying electric vehicles (EV), with a purchase intention of more than 50 percent. Compared to two years ago, consumers are willing to spend more for electric cars, and more than half (52%) of consumers are willing to pay a higher price for pure EVs, with a mean premium of  24,763 CNY, much higher than the 2009 level of 10,000 CNY. Consumers in Tier 1 cities such as Shanghai are willing to pay even more for EVs, 32,000 CNY on average.

The key audience for electronic vehicle manufacturers should be trend-driven consumers, who are looking for a unique model and are willing to sacrifice some cost efficiency for a green cause. Meanwhile, EV manufacturers should apply a differentiated marketing strategy combined with a novel approach to help convert the trendsetters into early adopters, who will in turn lead the market and contribute to the development of the industry’s latest selling point.

Turbocharged engine
Compared with dual-clutch automatic transmissions and fuel injection technology, turbocharged engines have the greatest name recognition of technical features, and they are a first priority purchase option for 87 percent of consumers considering a car purchase.

Turbocharged engines attract the more sophisticated automotive consumer: consumer awareness and willingness to buy turbocharged engines are much higher among the medium- to high-price car consumers (priced 120,000 to 300,000RMB) than the economy car consumers. The number of car models equipped with turbocharged engines is very limited in the Chinese market so the high demand of the more sophisticated automotive consumer is far from satisfied.

Telematics
Of major interest and purchase consideration are telematics (GPS, on-board navigation), with 58 percent of consumers ranking telematics as their top consideration. Pre-collision safety (36%) and night vision system (37%) also registered strong interest among all generations of car buyers.

Leveraging social media to connect with consumers
To hear what Chinese consumers are saying about cars, Nielsen monitored e-forums and the social networking site Weibo. Social media in China has boomed, attracting millions of users and the interest of marketers who seek to use it to connect with current and potential customers. Based on Nielsen’s analysis price (39%) was the most discussed issue, followed by efficiency (36%).

Steven Li, CEO of China Nielsen Online Division, suggested that car manufacturers strengthen their online presence to better connect with potential buyers help them win word-of-mouth. Li outlines four classic types of online car consumers:

1. Potential buyers, who have no clear models in mind and are seeking information and viewpoints to help them in their decision
2. Potential buyers who have a clear model in mind
3. Those who have newly purchased vehicles
4. Grass-roots automobile experts

Consumers’ spontaneous comments about cars, whether they are positive or negative, can play an important role in purchase decisions, and car brands need to know how to engage consumers, particularly on social media.

Just one year ago, consumer morale hit an all-time low, and concern for job security and the economy were at the top of peoples’ minds.  With the economy strengthening and consumers feeling better about their job prospects and state of personal finances, work/life balance and health are once again key issues. 

The renewed optimism was driven largely by consumers in western China, who posted an eight point rise in confidence, helping to close the gap between the regions.  Consumers in Tier 5 locales (smaller towns, villages and rural areas) recorded a seven point increase in confidence from the previous quarter, thanks in part to a strong harvest late in the year as well as well-targeted government incentives.  All of this has translated into a renewed willingness to spend as consumers start the New Year.

“We saw a strong rebound in consumers’ willingness to spend, especially among Tier one and Tier five consumers.  Tier one consumers are more likely to be investing in stocks and bonds and planning holidays compared to people in other tier cities,” said Mitch Barns, Greater China President at The Nielsen Company. 

 Nonetheless, more than half of Chinese consumers continue to make it a high priority to put spare cash initially into savings, followed by investing in their children’s education and purchasing new clothing.

 Read the full press release.

How China shifts from an export model to one driven by internal growth is the subject of a new article from Nielsen Vice Chair Susan Whiting.  According to Nielsen’s most recent Global Consumer Confidence Survey, nearly three-quarters of Chinese consumers are optimistic that their country is not in a recession, and China’s Consumer Confidence Index (CCI) of 96 has remained relatively stable since 2006, well above the CCI global average of 84.  The article outlines the challenges facing China both at home and abroad as it seeks to re-invigorate its economy.

Click here to read the full article in February’s Consumer Insight magazine.

In addition to watching the Games on TV, three of four people in China will keep abreast of Olympics events via streaming online video, one-third will rely on mobile phone text updates, and 14% will view video clips of the Games on their mobile phones, Nielsen’s survey found.

Two in 10 Chinese plan to use online video streaming as their main method of viewing this summer’s Olympics, while another two-thirds of Chinese will keep abreast of the Games via newspapers.

Many Chinese will also adjust their lifestyles to fit the Olympics schedule.  Nine in 10 plan to adapt their personal schedules to accommodate the Games, and 7 in 10 will change their working hours.

Another 30% said they will watch Olympics coverage at work, as many Chinese companies are making special arrangements for Olympics viewing during the work day.

View the full press release.