China Insights

Mapping a new route to luxury auto success

Guillaume Saint

Global Automotive Lead

Auto 2013 24.06.2014 / 06:52

Luxury Road Full

The emergence of new lifestyle needs is creating opportunities for challenger brands.

The mechanics of premium brand success for auto are inherently similar to those of the other luxury sectors like jewelry, luggage, cosmetics or apparel. Customers are most likely to consider luxury brands that convey values they identify with, make a clear promise, and project an immediately recognisable badge of success. However, the nature of the promise and values they seek may be starting to evolve.

The established markers of luxury in the premium car market comprise a 'savant mélange' of popularity, heritage, extravagance, quality, innovation and performance. These are traditional values that bestow customers with symbolic wealth and status, belonging with a higher social class, and a self-confidence boost. And a great many premium car customers still adhere to them when making their final choices. 'Face' is still a critical factor for them so they take peers' opinions into serious consideration. With many luxury customers intrinsically less knowledgeable about vehicles than their peers in other markets, choice of model is first and foremost an expression of social status.

At the same time though, our studies also identify the emergence of new differentiated needs in China. If brands can develop offerings which speak to these needs, they are likely to be able to increase their influence at the point of purchase and help seal the deal with customers. The consumers influenced by these new emerging lifestyle needs can be categorised into three groups:

Connoisseurs, fascinated by engineering and the technical details of car design that promise enhancements to performance, control or driving safety. These are true believers in the capacity of advanced technology to improve the driving experience. They are discerning, seeking out innovation and comparing technical details across brands.

Easy-going, self-focusedcustomers, who prioritise comfort and personalisation. They want a car that functions as a luxury cocoon: comfortable and easy to handle. They are less constrained by others' opinions and put their own feelings at the forefront of their decision criteria. Their car must be a convenient and enjoyable place to be. The growing importance of personalization through options, accessories, and customer service reflects brands' responses to this group.

Fashionistas are the early adopters of new trends, determinedly expressing individualism and self-assuredness. Their need is to be the focus of attention - they display their individual taste through their car choice, and they won't compromise to fit in with public opinion. They are more influenced by Western value and small, fashionable cars - which contrast with the traditional codes of luxury - may attract them. Co-branding with fashionable apparel brands can reinforce appeal amongst this group.

These three emerging auto audiences are still relatively small, but growing in size and influence. And amid the increasingly crowded luxury auto market they offer new entrants an opportunity to compete on the basis of design, features, equipment and services, rather than relying upon existing popularity or brand heritage.

We foresee that the increasing influence of these new auto buying needs will lead all manufacturers to put forwardcomplete car experiences that move luxury vehicles from transport tool to a holistic experiential endeavour. This is a recipe for innovation and pushing boundaries - and for an exciting future for luxury auto in China.

Source: Kantar TNS

Editor's notes

To reach the author, or to know more information, data and analysis of China's auto market, please contact us.

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