Car Marketing in China Paper

Introduction:

China being at 3^rd position at luxury car marketing is making its routes to get its market on 1^st 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 in increasing at higher speed.

Likewise in other countries China women are also have greater percentage who are willing to buy the branded things and according to Maserati’s managing director of Greater China, Bo Yaming that 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 now a ’days. Here actually needs points out the factor of balancing the status in the society, so the way of living and obviously everyone wants to drive a luxury car. We can also take this point as factor too yet it is a general one. Above all are the things which are responsible for the raise in the luxury car marketing in China but we will also see that what strategies are adopted by the companies to fight back and get 1^st 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. Like they are advertising every car new 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 the 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. In which they are having electric car and mainly the solar energy working cars which are actually not that much effective but many companies are trying their best. Tesla being a great company has introduced its electric car which is fully auto drive and 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 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 specialized automotive design company and being with Chery this gave a great start for more Chery development. (Luo, 2005)

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

1. Government Polices:

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

Simple answer can be that lower the taxes, so this is true. They actually did, in 2004 China was the 3^rd largest car marketer in the world and this was because of the reason of government policy of a fixed permit fee on all the imported cars. This actually encouraged the companies to work in China because they can have their profit and as we know that 1^st goal of a company is always to have the 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 to increase their working platform in the China, companies like Volkswagen, Toyota, Ford, and Mercedes-Benz and many other higher rank companies specially Maserati and Ferrari as the names are very loved, expanded their market in the China.

And 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 increase in the quota of imported cars (T Phani Madhav; M Dakshi, 2004).

1. Large number of car companies:

As we know that where ever there are 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 which are working in China so they would have a good competition between them because when there are for example 20 companies and all of them are selling a 4 seater luxury car, then only the company whose car would have more better mileage, beautiful and other things higher than other companies will win the race in market for that car. Likewise more are the applicants for a job of manager more will be the competition.

1. People interest in luxury cars:

Now having a look on the interests of people, according to many case studies and articles on websites Chinese women tends 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 US or Europe,” Tom Doctoroff, a senior partner at brand and marketing consultancy Prophet, told this 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 car than their neighbor or etc. Just to remain at higher level of their status in the society. This creates a competition between the companies that whose product will be more efficient or effective so, it can make trust for itself in customers for future. And it’s already be 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 revenue from car market. And that’s the highest revenue. (Statista, 2018)

This shows that how much China is thinking about the car market and from this one can acknowledge that what kind of competitions is there 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 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 on the percentage of production of large cars by some different companies in China. Taking fist the Chery Co. which will have amount to 455 t. pcs. In 2021. (Statista, 2018)

And going more forward to other company like ford which will have amount to 784 t. pcs. In 2021. (Statista, 2018)

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

Now from these tables we can come to point that amount of luxury cars production 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 shows the amount of actually luxury cars in China which is increasing highly in between years 2013 to 2019. (Statista, 2018)

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

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

Different companies have different strategies to maintain their place in luxury car market of China. But generally all of companies are somehow doing the similar ways too because like efficiency and affectivity of product is main goal to almost every organization or company generally. 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 market. Let’s stick our self just to two points for a while brand awareness and brand attitude. These are the two factors which are to associates because of which a company gets its value raised mainly. The more awareness will a brand have in the area more is its number of customers and talking about brand attitude itself which plays a big role in maintaining the status of its customers in the society that’s the most beautiful thing and is best way to get your company on scales.

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

By lowering the complexity and headache buying cars through dealers by means of lowering the dealership 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 the customers to buy the luxury cars online. This somehow shows the trustfulness of customers on their company because normally buying things online needs a large amount of confident because you can be scammed in any moment and lose whatever you have got in your pocket. So only Maserati is the company in China right now which is hosting a site on Tmall which gives itself a benefit to sell its cars online and make 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 functionality of their e-commerce websites, according to the study, which looked at 18 luxury car brands in China. (Rapp, 2017). This somehow give 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 no much dealership commission and just your own profit and ease of selling cars too according to the need of people and what they actually like.

We are going to discuss the major luxury car companies’ strategies here. Now thing is that taking example of Mercedes-Benz which have a big name, have big strategies as well to maintain its place in market like. 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 .Already discussed that 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 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 that presenting the new E-Class whose innovative assistance and safety systems have been taken the model a step further in direction of autonomous driving. And further more 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. And these new technologies thing is attracting the people of China and whole world too because rather 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 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. Taking an example of simple a new model of any car company, the advertisement of that would require a beautiful female model , now because the difference here comes that again a large percentage of Chinese women spend more money on the luxury cars, so this thing shows that companies want to impress their customers to the beauty of 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 actually company to convince the super models of movies and other characters which are very famous among the people in their advertisement so they will have more trust on their liked models and so obviously trust will also be made on 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 which companies do to come on front line is making themselves global means to say that they are trying export their goods out of China too so making a view in people minds that this company have something great in it that’s why its products are accepted globally. In this they focus on training people phycology that our relationship with customers is not ending it’s for life time 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. Because in this way people will become loyal to that company and company will have a fixed line of profit coming.

Life time guarantee and 10 years guarantee etc. Such terms and policies are being used by companies to overcome the problems done due to scams happen to company, like a company is scammed that it told its user a lie that their mileage of 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 on them.

Conclusions:

China being the highest revenue holder in car marketing have a high raise in the luxury car competition in it. And reasons of this competition is the high demand of luxury cars in China and the best policies of the government in which they have lowered the import taxes and increase 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 China luxury car market is having good management and its results can been seen in the Global Comparison Revenue ,which shows the 1^st rank of China and one cannot say that there are any major management issues in this sector of China trade.