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August 21, 2017

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Home » Business » Autotalk Special

Online sales: Whither the young, so go automakers

CHEN Wei, who was born in 1990, bought his first car last month. He said his final decision came after surfing vehicle information online with a mobile app he frequently uses.

He is part of the most lucrative segment of Chinese consumers — young people — and the auto industry is eager to tap into it.

Like Chen, those born on the cusp of the 21st century rely on digital devices for most aspects of daily life, including what they purchase. No longer content to make the rounds of dealerships, they research cars online and often make judgements by information collected there.

“Buying a car certainly involves listening to recommendations from parents and friends, but online sites and social platforms also play important roles before the final decision is made,” Chen said.

Digital channels allow young consumers to browse models, check out specifications and compare prices on automotive websites, mobile apps and social platforms such as WeChat.

Indeed, the Internet has become the prime means for the post-1990s generation to access and gather information, according to market research firm Ipsos. About 85 percent of that generation turns to the Internet for information, and 64 percent of buyers make choices based on mobile apps and mobile website pages, according to its survey of 900 car owners and potential buyers.

Only 22 percent of respondents born in the 1990s or later said they rely on traditional car dealers when looking to buy a car.

China is the largest automobile market in the world, and young buyers are expected to keep that distinction rolling forward. Automakers are actively formulating marketing strategies to address what the younger generation wants in terms of wheels. They are using all forms of digital communications to get across brand messages.

Japanese carmaker Toyota is among those. Akio Toyoda, chief executive officer of Toyota, opened an account on China’s social platform Weibo earlier this month. The Sina-owned microblogging site is popular among young people, with about 159 million active daily users.

Of the 70 million users interested in automobiles on Weibo, nearly half were born in 1990 or later, according to a report from the company.

Toyoda’s first microblog post was written in Chinese. “Hello, everyone, I’m Akio Toyoda. I have started using Weibo and hope we can be friends here.”

He accumulated more than 50,000 followers within the first two weeks of the blog. Chinese netizens discuss Toyota models under his posts, including imported Lexus vehicles and the Highlander sports utility.

Daimler’s Mercedes-Benz is also attempting to make inroads with the young.

“In the past two years, the average age of Mercedes-Benz users has been declining,” said Duan Jianjun, executive vice president for sales and marketing at Beijing Mercedes-Benz Sales & Services Co. “Youth are an important trend in the Chinese market. Young people need to express themselves, and we need to use their language to communicate with them.

Mercedes-Benz sponsored a popular Chinese reality TV show this year. The show and the ads are aimed at young audiences, with Mercedes featuring its GLA SUV model when viewers watch the show on the Internet or via mobile phone.

The company is turning out a new generation of models aimed at the young. In the first five months of this year, A-Class, B-Class, GLA SUV, and CLA sports sedan accounted for 20 percent of total sales, according to the company.

German automaker BMW is not far behind in the quest for young buyers.

“The average age of BMW owners is 35 years in China, the youngest of anywhere around the world,” said Liu Zhi, president of BMW China Automotive Trading. “In Germany, the average is 53 years old. We estimate that in the next five to 10 years, China’s post-1990s generation will become the mainstream of our customers.”

Young consumers, he added, are savvier than their elders when it comes to new car features, such as digital connectivity.

Earlier this year, BMW unveiled its all-new 1 series sedan to target young Chinese. The company also sponsored an online entertainment show on Chinese video streaming site Youku. Senior executives of BMW and BMW Brilliance Automotive Ltd have appeared on the program to tout the advantages of the new sedan series.

Young consumers are encouraged to watch the show on Youku and share their opinions through social platforms such as Weibo. The company said the program has attracted about 12 million viewers.

Consultancy firm Accenture stressed in a report that car manufacturers need to keep abreast of digital communications favored by the young if they want to engage in brand dialogue.

Chen said he is well aware of such marketing strategies.

“Automobile companies have begun plugging their brands through online channels,” he said. “I have seen many marketing campaigns introducing new car models on online sites. Carmakers have no doubt realized that digital channels can have a huge impact on young buyers.”


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