Chinese consumers prefer German over American brands - James Roy

James Roy

Especially in the car industry, American brands are fighting heavily with their German competitors. And the Germans are doing better tells retail analyst James Roy to Bloomberg.

Bloomberg:

Mainland buyers have traditionally equated luxury with German nameplates. Volkswagen-owned Audi is China’s top luxury brand, with 30 percent of the high-end market in 2015; BMW is No. 2, with 25 percent; and Daimler’s Mercedes-Benz line is third, with 20 percent. 

Cadillac is far behind, tied with Chinese automaker Geely Automobile Holdings’ Volvo at No. 6—they each commanded 4 percent of the market last year, according to Bloomberg Intelligence. Lincoln had less than 1 percent. “There really is a solid association in Chinese consumers’ minds with the premium German brands,” says James Roy, associate principal of China Market Research Group. “American cars are viewed as fine and good and functional, but they don’t have that premium image.”... 

President Xi Jinping’s campaign against corruption and conspicuous consumption among officials may also provide an opening for U.S. cars. “Consumers are trading down,” says Roy of China Market Research Group. “People are not looking to be as obvious or flashy with their wealth as before.”

More in Bloomberg.

James Roy is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more branding experts at the China Speakers Bureau? Check out this list.  

Related articles

• No Cadillacs for Old Men in China
• Geely Launches .Auto Website
• Hyundai to take on BMW and Benz
• Cadillac Attracts Younger Men in China

Expensive cars and their drivers: what are their characteristics? - Rupert Hoogewerf

Rupert Hoogewerf

Rich Chinese think their cars represent the way they stand in society. But Rupert Hoogewerf, founder of the Hurun Rich List, found out there might be a huge difference between the car owners and the rest of the Chinese on how they feel about the cars, he tells the Shanghai Daily.

The Shanghai Daily:

The Hurun Report found some disparities between the public stereotype of specific luxury car owners and how the owners think of themselves. 

Mercedes Benz owners are viewed as entrepreneurial, cultivated and successful, which is pretty much in line with how their owners see themselves. 

BMW owners describe themselves as owners of small and medium-sized businesses or senior managers in multinational companies. They say they have a positive attitude and believe in living life to the fullest while being relatively discreet. That’s not quite the public stereotype of BMW owners as nouveau riche, materialistic and show-offs. 

Land Rover owners are considered to be nouveau riche, second-generation wealth and show-offs, while Land Rover owners consider themselves to be professional, senior managers and self-made people. 

Volvo owners are viewed by the public as valuable members of society, low-key, morally upstanding and family-oriented. Of the eight car brands surveyed, Volvo car owners came closest to their image. Additionally, they consider themselves to be returnees. 

Audi owners are viewed as government officials, mature and experienced. This image is the most defined in all the eight brands. Audi owners consider themselves to be white-collar workers with a positive attitude toward life and a zeal to live life to the fullest. 

Cadillac owners have the image of mature and successful white-collar workers. The owners consider themselves to be senior managers in multinationals. Infiniti owners have the public image of second-generation rich, film stars and highly active people, while Infiniti owners view themselves as white-collar workers. 

Lexus owners don’t fall into any distinctive public stereotype, while Lexus owners consider themselves to be white-collar workers, professionals and senior managers in state-owned enterprises.

More in the Shanghai Daily.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.  

Related articles

• Chinese buy more than ever overseas - Rupert Hoogwerf
• Thousands turned out to celebrate Chinese New Year 2015 in Liverpool

Profiles of luxury car owners – Rupert Hoogewerf

Rupert Hoogewerf

Luxury car brands tell much about the ambitions of their owners, and how people think about them, disclosed the Hurun White Paper on luxury cars last week. In the Global Times an overview of the profiles of the owners of Audi, BMW, Mercedes- Benz, Lexus, Volvo, Land Rover, Cadillac and Infiniti, according to Hurun founder Rupert Hoogewerf.

The Global Times:

The report came to some interesting conclusions. For example, the public opinion of Mercedes-Benz and Volvo car owners are very similar to the way the owners of these cars view themselves. The public perception of BMW owners contrasted greatly to the personal opinions of the owners. 

Mercedes-Benz: Owners of Mercedes-Benz cars are considered to be entrepreneurs, cultivated and successful. This was very much in line with how owners of Mercedes-Benz cars viewed themselves. 

BMW: Those who drive BMW cars consider themselves to be small and medium sized business owners, or senior managers of multinationals. They see themselves as being positive and are relatively discreet, all of which contrast to the public perception that they are nouveau riche, materialistic and pretentious. 

Land Rover: Land Rover car owners are considered to be young rich people who are boastful and vain. However, the owners consider themselves to be professionals and self-made businessmen. 

Volvo: Volvo cars, often viewed as inexpensive and practical, are unsurprisingly associated with low-key and valuable members of society. Of the eight car brands owners surveyed, Volvo car owners came closest to their public image, viewing themselves as being family-orientated and loyal Volvo customers. 

Audi: Government officials are thought to be the most likely owners of Audi cars. This image was the most distinct image of all the eight brands. Audi owners consider themselves accomplished white-collar workers. 

Cadillac: The owners of Cadillac cars are perceived as being mature and family-orientated, while the owners describe themselves as senior managers in multinational companies. 

Infiniti: Infinti cars are viewed as being owned by film star types, but the owners see themselves as young, active and middle-class workers. 

Lexus: The survey among the public failed to find a distinct class for Lexus car owners, with many respondents giving contrasting opinions. Lexus owners, however, consider themselves to be hard-working professionals in senior management roles of State-owned enterprises. 

Rupert Hoogewerf, the chairman and chief researcher of the Hurun Report, shared his opinion on the survey's results. 

"Spending money on a nice car is the first outward sign of success for many Chinese. The objective of this report is to highlight the brand image of these luxury cars in China," he said.

More at the Global Daily.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more luxury good experts at the China Speakers Bureau? Check out our latest list.  

Related articles

• Analyzing the luxury car market in China - Rupert Hoogewerf
• Here's What Your Car Says About You... According to Chinese Tastes
• European and Asian automakers dominate AJAC awards
• The state of the US luxury car market - BMW vs Mercedes
• Ford Betting On China To Revive The Lincoln Brand

Mercedes: heading for a struggle in China - Shaun Rein

Shaun Rein

Until last year Mercedes sold its sedans like hot buns on the China market. But the preference for SUV's and higher-profile competition makes the future less certain for the German car market, writes business analyst Shaun Rein in Business Week.

Shaun Rein:

Demand is so strong for high-end SUVs that the Porsche Cayenne has a six-month waiting list and is barely discounted, if at all. Mercedes rolled out the GLK SUV at the 2008 Beijing auto show, but wealthy Chinese considered it low-end at a mere $50,000. The M-Class, an older luxury SUV, is boxy and plain and lacks the handling ability of its rivals. Mercedes needs to roll-out a high-end, more muscular SUV. 

Finally, Mercedes’s dealer network suffers from the worst satisfaction scores achieved against BMW, Audi (NSU:GR), Maserati, and Porsche, based on customer satisfaction surveys and mystery shopping that we completed. Common complaints have been that Mercedes salesmen were “unhelpful”, “unknowledgable,” and “unprepared” to deal with customer questions. 

Mercedes can certainly rebound in China. It still has strong brand resonance and in the next quarter will likely benefit from Chinese boycotts of such Japanese brands asLexus (TM) and Infiniti (7201:JP). If Mercedes can release new models at different price points—yet maintain a cohesive brand positioning—it has a chance to return to the top ranks of luxury automakers in the world’s biggest auto market.

More in Business Week. Shaun Rein is a speaker at the China Speakers Bureau. Do you need him for your meeting or conference? Do get in touch or fill in our speakers' request form.

Related articles

• Anti-China hysteria in US "concerning" - Shaun Rein (chinaspeakersbureau.info)
• The changing Chinese preferences for luxury goods - Shaun Rein (chinaspeakersbureau.info)
• China says, do not push us around - Shaun Rein (chinaspeakersbureau.info)
• 16 Years away from Cheap China - Shaun Rein (chinaspeakersbureau.info)
• Foreigners in China should learn to work the ropes - Shaun Rein (chinaspeakersbureau.info)

China's rich get richer and more confident - Shaun Rein

Shaun Rein

Luxury good producers like Louis Vuitton and Porsche do not have to panic after Robert Frank's WSJ article suggesting China's wealthy stop spending. Frank looked at the lower middle class, argues business analyst Shaun Rein in CNBC. According to his research, the real wealthy Chinese spend more than ever.

Shaun Rein:

The results show the ultra rich, people worth more than $10 million, are actually getting richer and remain very confident about their earning ability and those worth more than one million dollars also reported being very confident. The vast majority reported that they planned to spend at the same or higher level in 2012.  One businessman in the services sector in Shanghai told me, “The economic problems are serious but we expect profits to rise by 30 percent next year. Even if profits don’t go up, I plan on spending at the same levels or more.” 

What do these wealthy Chinese want? Our research suggests that they are continuing to go for ultra-high end products and are looking to buy luxury cars like Mercedes and BMW. Restrictions on the number of houses one can buy and a weak stock market is also making the wealthy spend more and invest less. 

The result is that exclusive brands, like watch and jewelry brand Van Cleef & Arpels for instance, will continue to do well in 2012 as the wealthy start to differentiate themselves from others. Many wealthy Chinese told us they are tiring of the more popular luxury brands like Louis Vuitton because they are becoming too common.

 More in CNBC.  

Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch or fill in our speakers' request form.

More links to Shaun Rein and his upcoming book The End of Cheap China in Storify.

Related articles

• Only Europe can save Europe, not China - Shaun Rein (chinaspeakersbureau.info)
• Luxury spending moves to smaller cities - Shaun Rein (chinaspeakersbureau.info)
• Poor health care and education cause rich to emigrate - Shaun Rein (chinaspeakersbureau.info)
• Bullish on consumer demand, retail - Shaun Rein (chinaherald.net)
• Why Louis Vuitton cannot afford to be too popular - Shaun Rein (chinaherald.net)

Audi loses traction as consumer preferences change - Shaun Rein

Shaun Rein

Audi has lost 25% market share over two years time, as consumers prefer sexier cars like Mercedes and BMW, tells business analyst Shaun Rein in Bloomberg. Audi's asset as a government car has now become  a liability.

Bloomberg:

Audi’s share of China’s luxury-car sales has tumbled by 25 percent in less than two years as state agencies and executives tighten budgets and younger buyers seek alternatives to sedans traditionally used by the government. The German automaker supplied an estimated 70 percent of cars used by the government and state-held enterprises during the 1980s. 

“Audi is seen as being a bit old-fashioned because of its association as being a government car,” said Shaun Rein, Shanghai-based managing director of China Market Research Group. “Wealthy consumers today want something sexier, more indulgent, which is why BMW and Mercedes have done well.”... 

“Ten years ago, everyone wanted to be in government as that was seen as the ticket to wealth,” said Rein of China Market Research. “Today, the new wealthy consumer doesn’t want to be associated with officialdom.”

More in Bloomberg. 

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch, or fill in our speakers' request form.
More links to Shaun Rein here.

Related articles

• Needed: a China-first strategy - Shaun Rein (chinaspeakersbureau.info)
• Bright Dairy buys rather than builds brands - Shaun Rein (chinaherald.net)
• Next: the US China trade war - Shaun Rein (chinaherald.net)
• Why Chinese prefer wine over beer - Shaun Rein (chinaherald.net)
• Wal-Mart cannot win on prices in China - Shaun Rein (chinaherald.net)