How the world caters to the Chinese auto market

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A shot of a car show model on the hood of a Ford at the 2008 Beijing Auto Show.

Ford, on display here at the Beijing Auto Show, is studying the competition in the Chinese auto market. (Photo Credit: CC BY-SA/Tim Wang/Wikipedia)

Since 2009, the Chinese auto market has been the global industry’s greatest frontier, which means that a great deal of research goes into which brands will fare well in the Middle Kingdom. Frequently, selling cars in China means changing the designs of popular models. A recent article in The Detroit Free Press notes that it’s hard work, but automakers know the demands of the world’s biggest market must be met.

Listening to Chinese voices

Joe Hinrichs, Ford’s president of Asia Pacific and Africa, sees the need for adaptation when it comes to China.

“As the largest market, you have to adapt,” he said. “You can’t ignore it when developing new products.”

Automakers worldwide are working to address the needs of Chinese auto buyers, particularly the most affluent. Well-to-do owners who are typically transported by a driver have requested that global automakers produce versions of their work with larger back seats for comfort. In addition, models that had eliminated rear ashtrays years ago are appearing with ashtrays.

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Less-wealthy Chinese consumers have made their voices heard, too. Considering that outside automakers sold 18.5 million vehicles in China in 2011 – a total that is expected to increase 5 percent annually – the masses can’t be ignored.

Understanding Chinese culture

The transformation of foreign vehicles in the Chinese market is true across the board, not just in a few regional products, notes the Free Press. Buick recognized the importance of understanding Chinese culture, and because of its efforts since the early 20th century, the Buick brand has survived. Moreover, the design of luxury sedans now tends to begin with the Chinese consumer in mind, even for models sold globally.

“The Chinese market will change the product and retail experience,” said Jacob George of J.D. Power Asia Pacific in Shanghai.

Germany’s failure and success

One case in which resistance to adaptation harmed sales was with German automaker BMW. When it entered the U.S. market, BMW resisted change and included technology like the iDrive infotainment system before U.S. consumers were ready for it, noted George. BMW didn’t make the same mistake with China.

“Automakers are entering the market with a more open mind to cater to the Chinese,” said George.

Rival German automaker Audi became a sales leader in China in the late 1990s, thanks to its line of luxury sedans.

Detroit’s battle for China

Buick and Chevrolet’s history of success in China has catapulted GM into the lead among U.S. automakers in China. GM plans to introduce 60 new products and double its capacity in China over the next four years, which indicates operations are full steam ahead. Following in the footsteps of BMW, GM will continue to produce long wheelbase options, as this has proven popular in the Chinese auto market.

Ford, on the other hand, is studying the competition.

“We have no plans for an indigenous brand but continue to study the competition and government policy,” Hinrichs said.

What Chinese drivers like

While long-wheelbase vehicles are known to be popular in China, other key elements exist. A highly decorative front grille is appreciated. Including the latest technology has been a requirement, as well as additional rear-seat interior controls. As Ford designer Michael Arbaugh told the Free Press, these features should include a cigarette lighter and ashtray, as a higher percentage of Chinese drivers smoke than their U.S. counterparts.

There is room for competition in China, particularly in the luxury market. In the past, Audi and BMW have dominated the luxury market, but young captains of industry now want to stand out. According to Saad Chehab, who heads the Chrysler brand in China, his company’s new 300 will make a statement among luxury buyers.

“It’s a unique proposition for people who’ve achieved success here,” Chehab said. “There are young millionaires here with limited choices, Audi or BMW, and they want to stand out. They like the image of gritty Detroit.”

2012 Beijing Auto Show kickoff


Detroit Free Press


The Street

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