China helps the European cars manufacturer to survive

This year, China helped the European car sector by importing a huge amount of luxury and electrical vehicles.

In fact, while China has become the worlds’ largest automotive market according to Statista, Europe’s automotive sector is suffering a decrease in 2020 due to the lowering of internal demand.

Demand in China focuses on the electric car industry

Chinese demand for Battery Electric Vehicles (BEV) is boosting as the pandemic leads to a major Environmental awareness among Chinese citizens.

The International Energy Agency stated that China owns 45% of the global stock of BEVs, the biggest.

In addition, even if the domestic production of Electric Vehicles is impressive and takes over a majority of the market, China is the 3rd most important country for imports of electric cars (10,6%), after Belgium and Norway.

Here the list of the countries from which China is importing the higher number of Electric Vehicles: United States, Belgium, Germany, Austria, Japan, France, Spain, Sweden, Thailand, United Kingdom, South Korea, and Italy.

The luxury car industry is strong in China

While the consumption growth in countries like France, UK, Italy, and Spain has stopped, China’s market does not suffer too much from the health crisis.

The market of luxury cars in China is almost all dominated by foreign companies, and COVID-19 seems to not stop this trend. Germany, in fact, saw an increase in the production of automotive vehicles this October, principally due to China’s demand.

Let’s see who are the major foreing players in the Chinese luxury cars market:

  • Mercedes Benz
  • Volkswagen AG
  • BMW
  • General Motors Company
  • Ford Motor Company

The main reason behind the growing demand for luxury cars is the strong interest among young Chinese toward the international high-quality brands, they see the owning of a luxury foreign car as the demonstration of a higher social status.

Joint ventures (JVs) between foreign auto brands occupy the China’s car market as a whole

If the Chinese luxury market relies on foreign brands, the whole automotive market in China is occupied by JVs between domestic manufacturers and important international players as Volkswagen or General Motors. This cooperation with important luxury brands, by the way, seems to target lower-middle- and mid-class consumers. Among the most famous Sino Joint Venture there are FAW, SAIC Motors, Dongfeng.

Many of the Chinese automotive companies are still state-owned entity and this feature is very useful in China because of the Chinese trust the government. A demonstration is the following: after the fuel scandal of Volkswagen, which has a joint venture with Shanghai Saic, consumers keep buying the brand’s cars; this because people firmly think that state-owned companies follow government regulations.

In conclusion, foreign companies must evaluate to partner with one of the Chinese Automotive Giants.

How you can promote a car brand in China?

Considering the interest of Chinese customers towards foreign brands when the market category is luxury, it is necessary to highlight that to enter the luxury market in China can be difficult for foreigners.

Many luxury companies demonstrated to have great difficulties in doing branding in China because they are not able to gain Chinese trust with a customized campaign. Campaigns, in fact, must be adapted to the Chinese taste.

However, due to the Chinese idea that International synonym with good quality, we can say that the road for international brands has already been opened.

Digital is everything in China

Chinese purchasing behavior is increasingly related to digital platforms. Chinese spend a lot of time on the internet, so any company that wants to enter the market should consider a digital strategy rather than a traditional one.

McKinsey stated that “Chinese consumers usually make 10 to 12 visits to online and offline touchpoints – including search engines, product sites, and physical store”

And also: ”Automobile customers spend 40 hours online before purchasing a car.”

Why is more important to invest in inbound marketing than outbound marketing to sell cars

If you want to generate leads, outbound marketing can be an essential part of your strategy. Through journals, newspapers, Tv advertisements, and Radio you can attract the attention of your customers.

However, once they know about your existence, they surely are going to seek information about your brand on the internet. If a Chinese wants to buy your car, he/she will certainly check information and reviews on all possible digital Chinese platforms.

So, in order to generate serious leads, you need to build your online reputation on the Chinese online eco-system.

Measure ROI to increase ROI

When we talk about the automotive sector, dealers are not used to measuring the ROI of digital marketing activities, by the way, it’s demonstrated that dealers that measure it have growth in ROI of 4 times YOY.

Building an online reputation, your car brand will be visible in China

Have a well-designed Chinese website

After they check information about you on all possible platforms, Chinese customers are going to visit your website. There, they need to find impeccable design together with intriguing storytelling and a clear Call to Action.

To write original storytelling adapted to Chinese society, you need to hire Chinese copywriters, because the language and the Chinese culture are very different from the western world, so even good Chinese speakers can easily make mistakes.

In addition, it is necessary to integrate quality landing pages to your website because it’s the first thing your potential customer is going to see.

Original content

To create fresh and interactive online content about your brand and products must be one of the first things to work on. Original content, high-quality images as well as good storytelling are all important factors for your marketing strategy. Chinese are increasingly used to high quality, so they can underestimate your brand if they see you are not good at creating this aspect.

In conclusion, creating high-quality content must be an obvious objective for luxury brands.

Marketing Automation

Your marketing strategy must include marketing automation. This activity consists of collecting data of internet users to understand if there are some potential customers among them. For example, if someone is looking for information about a certain sportive car, then he will receive an email that talks about that topic.

This tool is already very common among automotive companies since it has been proven to be very useful to increase ROI.

BAIDU

If doing SEO on Google is essential for a marketing strategy in the western world, on the other side the most powerful search engine is Baidu in China, with a market share of over 70%.

What you need to do/have for doing SEO on Baidu:

  • a website hosted in China
  • a Chinese domain (.cn) to rank on the Baidu first search results
  • a Keyword Analysis
  • a well-written page description (meta-tag)
  • high-quality content
  • many backlinks (from important website)

Press Release

To be famous in China, you cannot have just your own website or social media accounts, you also need to create a network around your brand. That’s why you must contact other companies that own a website or a blog visited by your target audience and ask them to link your website and talk about your brand. This activity is useful to generate leads.

Forums

Another place your brand should be present is the forum. When the Chinese look for information about you they always check this place, especially males. Your reputation is built also in this way, so you need to create a conversation about your brand on important forums in order to not be excluded by your potential clients.

The most important forum in China is Zhihu, so you should check and manage reviews on this platform as part of your online strategy.

Your car brand must engage customers to sell in China

The usage of social media in China is higher than in any other country, this lets us understand how important these kind of platforms are for a marketing scope. However, many industries, still have not optimized this place, especially in the B2B sector. Instead, doing great use of this key tool in China for any kind of business can lead to a competitive advantage.

China has an incredible number of popular platforms, and any platform can be used for a specific target. For example, old people usually have Wechat, whereas young Chinese spend time on video-sharing platforms like Douyin. Also, while women are more used to look for information on Xiaohongshu “Shopping Notes” or Live streaming on Alibaba platforms, men seek reviews on Forums or educational platforms like Bilibili.

KOL and KOCs

Key Opinion Leaders or Key Opinion Consumers are very popular in the Chinese world. The company must include them in their strategy, the collaboration with one or many of them can be the key to the success.

But companies also should think a lot about the right influencer or Ambassador for a campaign. These subjects should target the right audience. Also, to be effective, the campaign needs to relate to the right social media.

WeChat to nurture your audience

Open an account WeChat can be fundamental for your strategy, as it the most used Chinese app. They use it to pay, to read the news, to talk with their friends and with their family. Companies can use it as a newsletter, create interesting content to engage customers.

Companies can use the sense of community generated by the platform to build creative strategies. For instance, Pinduoduo has been able to enlarge its audience through the combination of gamification and WeChat. In fact, Coupons, lottery, and discounts sent via WeChat have been an effective tool to promote the platforms and their partners.

Weibo for brand awareness

Weibo is seen as the Chinese Facebook, an effective tool for advertisers and used by many KOLs. The platform is open, and people can access it without difficulties, then, the right campaign with the right KOL can reach an incredible number of people.

Xiaohongshu to build trust

From a standard social network, Xiaohongshu has become a social e-commerce platform. The main feature of the app is the importance its users give to reviews and the so-called “Shopping Notes”. Girls seek information about any products and usually check the profile of KOCs on it. They really trust KOCs, even more than KOLs.

Xiaohongshu is very popular among Chinese girls, is related to lifestyle products, but also luxury products. Even if can look weird to target women for selling auto, you should consider that women purchasing power is incredible, women are more and more reach and they love to buy everything for themselves, but also for their family, even luxury cars.

Digital platforms to target your audience

Not only for promoting, but your brand can also know well who is your target by using digital platforms. Alibaba, which is the owner of Taobao and Tmall, and many other famous platforms, continually collect data and let them available to companies. Brands can reach market niches leveraging these data.

Also, Tencent, collect data on SUV’s consumers some years ago. It made a comparison between those living in lower-tier cities and those living in Tier 1 and 2 cities. Thanks to research and analysis of the target, it has been possible to know what consumers’ online behaviors are, what entertainment preferences have, how strong their social media engagement is, according to living areas. The ROI grew by 30% using this process.

E-commerce: the emerging trend of the car sector in China

China is the land of digital and this is demonstrated by an emerging trend. E-commerce is becoming a very important place to sell a car, just think that 1 million cars of the value of USD15 billion were sold in China through online platforms in 2016. And Taobao and Tmall sold 100,000 cars that year in the Single Day.

Gentlemen Marketing Agency can offer to your company the opportunity to successfully enter the Chinese market. We can create an omni-channel strategy that includes: creation and management of social media accounts, SEO on Baidu, creation of a chinese website, PR, and monthly reports.

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1 thought on “China helps the European cars manufacturer to survive”

  1. Hi, do you know where I can find more similar articles, please? I am doing a research paper on Chinese luxury cars industry.

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