Western, Chinese Brands Vie For Customer Loyalty As Emerging Middle Class And “Nouveau Riche” Demand Continues To Grow
Buick has capitalized on its reputation for quality and luxury in the Chinese market, enjoying massive success and launching China-only models like the Excelle
As demand for new vehicles has remained sluggish in developed markets over the past two years, major automakers have rightly looked to retool their strategies to draw customers and build their brands in new markets. As we’ve written before, selling your brand in markets like China, where customers expect different things — and derive status from very specific brand attributes — represents both a major opportunity and a new challenge. A good example of an automaker that has benefitted from the “blank slate” allowed it by entry into the young Chinese market is Buick, which has a reputation as a car for older, or middle-aged, drivers in its native market, the USA, yet has — through aggressive branding and advertising efforts — developed a reputation as a sleek, luxurious, youthful brand in the Chinese market.
So how can car brands optimize their brand equity in China? Depending on where they come from, their strategies differ greatly. While American car makers like Ford have had great success in overseas markets like Europe by pushing their reliability and value, in the Chinese market imported cars are, generally, chosen by buyers to be a status symbol, rather than “inexpensive.” Ford, then, cannot compete on price alone, as Chinese automakers like Chery and Geely — which have sizeable lineups of entry-level models — will always be able to undercut them. As a result, it is important for foreign car makers to not just build their brand in China, but to build a strong brand in China, one that speaks to Chinese consumers in a way that domestically-produced autos cannot. To break it down further, foreign automakers need to build a strong, distinctive brand — a German car must fit Chinese conceptions of German cars, Japanese cars Japanese attributes and so on.
In practice, how are foreign automakers faring in their Chinese branding strategies? Today, Reuters looks into the “uphill road” these brands are traveling in China, and how they have refocused their branding strategies to varying degrees of success. Using the example of a “nouveau riche” car buyers who has traded his BMW in for an Audi — since the Audi has developed a strong reputation in China as a car for bureaucrats or (comparatively) “old money” while BMW is considered a brand for the nouveau riche (a group into which the buyer in question is loath to be grouped) — the article provides valuable insight into the particularities of a market so new that even seasoned marketers and branding execs are often at a loss to develop long-term strategies.
Posted in Automobile, Business, China, Culture
Tagged america, asia, Audi, auto, bmw, brand marketing, brand strategy, branding, buick, chery, China, chinese, east asia, europe, ford, geely, japan, japanese, korea, marketing, nouveau riche, old money, south korea, strategy
Luxury Carmaker Looks To Chinese Market For Sustained Growth Over Other Emerging Markets Like Russia
China has become one of Lamborghini's top markets after only four years in the Mainland
There has been quite a bit of news this week about predictions by the CEO of Lamborghini that China will overtake Italy as the second-largest market in the world for Lamborghini within three to five years, trailing only the United States. Lamborghini has aggressively sought growth in the Mainland market since opening its first dealership in Shanghai in 2005. The company’s expansion in this potentially vast market has been meteoric, with Chinese sales expected to account for much of Lamborghini’s Asian sales by 2012. While much of this comes down to the reduced demand for ultra-expensive autos in developed markets, it has been bolstered by Lamborghini’s sustained efforts to build a strong foothold in China, an effort that has been helped by an existing taste for expensive European goods.
As Reuters illustrates, Lamborghini is banking on a continued appetite for expensive European brands in the Mainland market, and has sent managers to China with the express task of cutting through any obstacles that still remain to reaching as many wealthy buyers as possible:
Posted in Automobile, Business, China, Economy, Luxury
Tagged Automobile, brand, China, europe, lamborghini, Luxury, wealthy
China’s 4 Trillion Yuan Stimulus Takes Hold, Picking Up Slack For Lower Export Figures
Slowing Exports, but growing domestic growth, may help China's recovery come sooner rather than later
Results coming out of China this week show that the government’s massive 4 trillion RMB ($586 billion) stimulus package — which is designed to boost domestic consumption, inland infrastructure construction, and earthquake reconstruction projects — coupled with a recent 30.5% boost in urban fixed-asset investment in the first four months of this year are helping the world’s third-largest economy get back on a solid growth track earlier than many other major world economies.
This is good news for China as well as the global economy, which pins much of the hopes of a relatively quick recovery on China’s domestic consumption. As Chinese consumers start to head back to shops, and manufacturers start to work their way up to higher capacity, demand for all kinds of products, both imported and domestically-produced, will help America, the EU, and Japan breathe slightly more easily. Bloomberg’s article today on China’s recovery progress gives encouraging signs that the country’s efforts to stem the financial crisis by investing huge amounts into infrastructure projects that should pay off in the long term should have a far-reaching ripple effect:
Posted in Business, China, Economics, Economy, Investment
Tagged associated press, bloomberg, China, Economy, europe, infrastructure, japan, nomura, recovery, stimulus, trade, US, wen jiabao