Car Marketing In China Research Paper

Introduction:

China, being in 3rd position in luxury car marketing, is making its routes to get its market on 1st rank in the world. For this there are many policies made by its government to get the best import and export business and luxury car marketing in China. There are many factors along with the policies by the government by which the competition between luxury car marketing is increasing at a higher speed.

Likewise, in other countries, Chinese women also have a greater percentage who are willing to buy the branded things, and according to Maserati’s managing director of Greater China, Bo Yaming Chinese women account for 40% of its buyers in the Chinese market, which is in stark contrast to the rest of the world, where women account for less than 5% of buyers (Zheng, 2017).

Things like the needs of people are increasing nowadays. Here actually need to point out the factor of balancing the status in society, so the way of living and obviously, everyone wants to drive a luxury car. We can also take this point as a factor, yet it is a general one. Above all are the things that are responsible for the rise in luxury car marketing in China, but we will also see what strategies are adopted by the companies to fight back and get 1st rank level in luxury car marketing.

Luxury car companies are trying their best to maintain their level of product so they can compete in the market. For this all companies working in China are adopting some ways and having some strategies because of which they are balancing their state. They are advertising every new car model with a hidden concept of using the heroes of people in order to get the trust of people. Companies are also working on the effectiveness and efficiency of their cars so that they are more good than their previous models and have more good and new features than other luxury car companies.

In order to do this these companies are trying to put some new technology innovation in their new car models. Which they have electric cars and mainly solar energy working cars, which are actually not that effective, but many companies are trying their best. Tesla, being a great company, has introduced its electric car, which is fully auto driven works better than a human, and can drive at 160km/hour speed in auto-drive mode. In order to do that, Mercedes-Benz also launched its car, which is also an auto-drive car, in 2016.

Discussion:

Looking at the luxury car market competition right now in China we cannot say that all this came a sudden and competition got higher. Simply no, because this starts from the time when China was dealing with passenger automobiles, not the luxury one yet. Let’s have a look at the two companies Chery and Dongfeng. Chery and Dongfeng are both government companies, and both of these companies had a hard time developing themselves, but Chery got its power soon, and how that’s the beauty. Chery first made its own new car models without any foreign company help and came on front line, this step became a downfall of Dongfeng because engineers of Dongfeng Company had a vision that if this company got down so will their future so they joined Chery Co. and this gives a new way to a different journey. A group of 20 engineers who joined Chery Co. made a new company named “Jia Jing Technology Company.” Which was basically a specialized automotive design company, and being with Chery gave a great start for Chery’s development (Luo, 2005).

Writing about the history of these two companies is just an example of how a company gets into the competitive world. Now the thing that how there was an increase in the competition in the luxury car market is easily solved. Because different strategies and different ways to get in the market were used by all the luxury car companies, Chery made its own models rather than copying or taking help from other companies. Let’s have a look at the competition in the luxury car market journey and how it started or even what were the causes for the competition between the companies at so high level.

• Government Policies:

Government policies have a big role in any industry of a country, but as we are considering the luxury car market so, let’s be on that. Now we can see that there are policies from 2000 till now the Chinese government is trying to encourage car companies to work in China, and the beauty of this encouragement is that companies are getting the prices or profits that they want from selling luxury cars. Now what are the encouragements by the government?

The simple answer can be that lower the taxes, so this is true. They actually did. In 2004, China was the 3rd largest car marketer in the world, and this was because of the reason of government policy of a fixed permit fee on all imported cars. This actually encouraged the companies to work in China because they can have their profit, and as we know, the 1st goal of a company is always to have a profit because it’s the first rule to live in the market or else you are dead. This had a very large impact overall because this made many companies increase their working platform in China. Companies like Volkswagen, Toyota, Ford, Mercedes-Benz and many other higher rank companies, especially Maserati and Ferrari, as the names are very loved, expanded their market in China.

Again, in 2004, when the government lowered the permit fee on imported cars, this was a huge benefit to the car companies, and basically, there was also an increase in the quota of imported cars (T Phani Madhav; M Dakshi, 2004).

• A large number of car companies:

As we know, wherever there are a small number of competitors, there is small competition between them, mostly because if there are 5-6 companies working in China so, obviously, they won’t compete because it would be difficult for them too to give efficient and effective marketing. But in our case, it’s not the case. There is a large number of companies working in China, so they would have good competition between them because when there are, for example, 20 companies and all of them are selling a four-seater luxury car, then only the company whose car would have better mileage, beautiful and other things higher than other companies will win the race in the market for that car. Likewise, the more applicants for the job of manager, the more competition.

• People’s interest in luxury cars:

Now, having a look at the interests of people, according to many case studies and articles on websites, Chinese women tend to spend more money on luxury goods and mainly on luxury cars. “In China, women are more ambitious… so they will buy more ‘high powered’ products than women in the US or Europe,” Tom Doctoroff, a senior partner at brand and marketing consultancy Prophet, told to Forbes, addressing the difference between women in China and the west (Zheng, 2017).

This thing shows the interest of people that they need more luxury cars than their neighbors etc. Just to remain at a higher level of status in society. This creates competition between the companies whose products will be more efficient or effective so it can gain trust for itself in customers for future. And it’s already been seen that people won’t see the amount of money they need to balance their status.

Now, talking about the ‘global comparison revenue, ’ China had US$469,088.0m in revenue from the car market. And that’s the highest revenue (Statista, 2018).

This shows how much China is thinking about the car market, and from this, one can acknowledge what kind of competition there is in China in luxury car marketing. The other reason for the luxury car companies to have big competition in China is also considered the interest of China in the car market, which causes the worldwide companies to have large-scale work in China because if they have good market value in China, obviously they would have a good name in the world.

Now let’s have a look at the percentage of production of large cars by some different companies in China. Taking first the Chery Co., which will have amount to 455 t. pcs. In 2021 (Statista, 2018).

Going forward, other companies like Ford will have an amount of 784 t. pcs. In 2021. (Statista, 2018)

The Geely oldest company in China, making large cars or can be said luxury cars, will produce an amount of 1,102 t. pcs. In 2021. (Statista, 2018)

Now, from these tables, we can come to the point that the amount of luxury cars produced by different companies in China shows the past competition between companies, current competition and future competition which can be there in China. The scales of large cars in all three graphs show the amount of actual luxury cars in China which increased highly between the years 2013 to 2019 (Statista, 2018).

This is almost the same for many companies working in China, and the production rate is almost increasing to manage and get a place in the luxury car market.

All of the above, we see the factors that are increasing the competition in the luxury car market in China. Now, let’s discuss the strategies made by these companies to hold their position in the luxury car market in China.

Different companies have different strategies to maintain their place in the luxury car market of China. But generally, all companies are somehow doing similar ways too because like efficiency and affectivity of products are the main goals of almost every organization or company. These strategies in general and company wise will be our subject now. Let’s have a look.

In this diagram, we can see the way a brand, in general, what does to maintain its place in the market. Let’s stick ourselves just to two points for a while: brand awareness and brand attitude. These are the two factors that are associated because of which a company gets its value raised mainly. The more awareness a brand will have in the area more its number of customers and talking about brand attitude itself, which plays a big role in maintaining the status of its customers in society. That’s the most beautiful thing and is the best way to get your company on the scale.

These simpler ways are used by a luxury car company to reach the value of the market and stay alive. In today’s life, there is a little change in the lifestyle of people which does have a great impact on the market too. Like now people like to have simpler ways to buy products and have a good time. And simpler way is to sit at home and order your product by cell phone, which is actually the thing in e-commerce. And China’s luxury car market is playing a very big role in China nowadays.

By lowering the complexity and headache of buying cars through dealers by means of lowering the dealerships in the area and increasing the easiness for the customers. This is being done by making the products available online means making a way for customers to buy luxury cars online. This somehow shows the trustfulness of customers in their company because, normally, buying things online needs a large amount of confidence because you can be scammed at any moment and lose whatever you have in your pocket. So only Maserati is the company in China right now that is hosting a site on Tmall, which gives itself a benefit to sell its cars online and gain more trust in people.

The latest report by digital intelligence firm L2, “China: Luxury Auto,” says that more than half of Chinese consumers are “willing to purchase a car online,” and car companies are beginning to listen. Accessible luxury car makers like Mercedes-Benz, Audi, and BMW are leading the way in the functionality of their e-commerce websites, according to the study, which looked at 18 luxury car brands in China. (Rapp, 2017). This somehow gives an opportunity to the sellers of luxury car marketers in China that they can get both profit and the ease of selling the cars. Because if we see there is not much dealership commission and just your own profit and ease of selling cars too according to the needs of people and what they actually like.

We are going to discuss the major luxury car companies’ strategies here. Now, the thing is that take the example of Mercedes-Benz, which has a big name and has big strategies as well to maintain its place in the market. Strengthening core business, leading in technology, pushing digitization and growing itself globally. Now, considering the part of leading technology, which means a lot to the customers in China. As already discussed, people want more good and new and innovative cars in front of their doors, and cars like electric cars and solar cars show a big picture in the technology world of luxury cars, and Mercedes-Bens is playing it big role in making new and innovative first-rate products.

In 2016, their major highlight was presenting the new E-Class, whose innovative assistance and safety systems have taken the model a step further in the direction of autonomous driving. And further in next year’s their planning is to give the people luxury cars and the more profitable cars for themselves to reach the market demands. These new technologies are attracting the people of China and the whole world, too, because rather than having a human driver, your car will be flowing on your command lines. (Daimler, 2016)

In general almost many companies have this kind of strategy to solve the upcoming needs of people in new technology and in the era of growing science. Actually, things like the efficiency of engines and stability of tires, or we can say some companies are now giving tubeless tires.

And for other purposes like awareness in the market of people luxury car industries try to advertise their products their cars. Take an example of a simple new model of any car company, the advertisement that would require a beautiful female model now because the difference here is that, again, a large percentage of Chinese women spend more money on luxury cars, so this thing shows that companies want to impress their customers to the beauty of the car and also show them that how would they look like with that car model and things what will be changed if they buy that car and how this car is going to change their status.

A big step during advertisement is taken by the actual company to convince the supermodels of movies and other characters which are very famous among the people in their advertisement so they will have more trust in their liked models and so obviously trust will also be made in the car company. So this is how the luxury car companies are trying to make their rank 1st in the luxury car market in China.

Now considering, another thing that companies do to come on the front line is making themselves global means to say that they are trying to export their goods out of China too, so making a view in people’s minds that this company has something great in it, that’s why its products are accepted globally. In this, they focus on training people in psychology that our relationship with customers is not ending. It’s for a lifetime or such kind of thing. Like many companies provides their customers a way that they can exchanged their old luxury car to new model with some payment yet making the customer to be bound to them for always. In this way, people will become loyal to that company, and the company will have a fixed line of profit.

Life time guarantee and ten years guarantee etc. Such terms and policies are being used by companies to overcome the problems due to scams. Company a company is scammed that it told its user a lie that the mileage of the car is 45L/liter, and then only the policies of the company will save the company from that scam. Because when there is a good customer care center of the company people will get more attracted to it because they will have someone always there to help and sort out their problems. That’s why companies are making more good and friendly support centers so that people or their customers can have trust in them.

Conclusions:

China, being the highest revenue holder in car marketing, has a high rise in the luxury car competition. And reasons for this competition are the high demand for luxury cars in China and the best policies of the government in which they have lowered the import taxes and increased the import quota of luxury cars, because of which every car company is trying to increase its production rate and import in China and giving the best and new of its best car models so people can have the good cars and companies obviously can get profit. Many strategies are being adopted by the companies in which their advertisement, awareness and innovative technologies are playing main roles. Chinese markets are a bird eye view for the investors and they are the most suitable ones to invest.

After all of this, we can say that the Chinese luxury car market has good management, and its results can be seen in the Global Comparison Revenue, which shows the 1st rank of China. One cannot say that there are any major management issues in this sector of China trade.