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Jun
2015

Luxury Cars February 2014

Buying cars during the Chinese New Year

The Spring Festival is a traditional Chinese festival with thousands of years of history and that has created many interesting cultural phenomenon. Among these distinctive Chinese habits is buying large or expensive belongings including cars.

Phenomena like this must be harnessed as a key element of a marketing strategy for any brand.
For many consumers who have the intention to purchase a car, they often wait for the CNY period, and those who might be planning to buy in the spring or summer often get wrapped up in the emotions of the Spring Festival and become impulse buyers just before CNY. For car dealers knowing the peculiar buying habits at that time of year, many offer significant discounts or upgrades to attract consumers. Suppliers and consumers together create a very prosperous environment during the holiday period.

Why do Chinese people buy cars before CNY?

  • In general, the New Year period in China is when the automobile market experiences a price war, and the price of many models are cut. Dealers also increase promotional efforts during the pre Spring Festival period, offering additional value such as free insurance, maintenance vouchers, petrol cards and gift packages.
  • During the Spring Festival, it is important to have a car for visiting friends and relatives, to go shopping and travelling and for general transport.
  • For most young urban white-collar workers whose hometown is in the countryside, have a car for visiting friends and relatives during the Spring Festival definitely gives greater face as all will see the vehicle.
  • As a reward for hard work during the previous year, people are easily persuaded to make a buying decision as a result of the whole atmosphere of this festive period.

The Tencent survey

Before CNY, Tencent.com, one of the biggest websites in China, carried out an online survey asking 13,733 individuals whether they would buy cars during the CNY holiday period.

Most of the respondents were aged from 18 to 50, and 66.58% of them didn’t own a car.

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Top luxury car sales in 2013

The influence of the government’s anti-corruption policies issued in late 2012 are still taking effect, and as a result the top luxury car sales in China have decreased a great deal.
Ferrari Greater China (including Mainland, Hong Kong, Macaw and Taiwan) accounted for 8% of worldwide sales, approximately 554 units, a 29% decrease compared to 2012. Lamborghini also suffered in China selling only 267 units, a decrease of 16.7%. Bentley by comparison stayed relatively stable selling 2,191 vehicles in 2013, a decline of only 2.8%.

However, relatively affordable luxury brands like Maserati and Porsche still enjoyed rapid growth in China. Maserati in particular sold nearly 4 thousands cars in 2013, about 4.3 times that of 2012. The company announced that China has been the biggest single market, representing about 1/4 of all global production. Porsche delivered 37,425 cars to Chinese clients, growing 19.9% when compared to 2012.

Store opening and brand activities

Volkswagen China start brand integration

January 21st Volkswagen (China) officially announced the transfer of several senior executives within the company. Ricky Tay, Till Scheer and other senior executives will continue working on their positions in Volkswagen (China) but at the same time take charge of Bentley, Bugatti and other imported high-end Volkswagen brands in China. It appears that the company is beginning to integrate its imported car brands into its domestic business and develop a shared network of media and other social resources.
Will Volkswagen enhance the integration further such as sharing a luxury cars’ sales network? Perhaps Bugatti will be seen at a Bentley 4S stores, or Lamborghini sitting alongside Porsche.

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Bentley

The first Bentley store of Suzhou, Jiangsu province, celebrated its opening on January 22nd.

Porsche

January 16th, the second Porsche Center of Ningbo, Zhejiang province opened.


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