China's Car Buyers Love The Internet

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

The second double-digit growth rates in the Chinese auto market are coming to an end. New challenges await manufacturers - one of them is the increasing importance of the Internet as a sales channel.

According to industry expert Stefan Bratzel, the world's largest car market, China, is on a historic threshold. "We are currently in the transition from a rapidly growing to an increasingly moderate market," he told the German press agency after a long stay in the Middle Kingdom.

For the German car manufacturers Volkswagen, BMW and Daimler, the business situation is currently several times tricky. According to a study, manufacturers of high-horsepower models in their home country continue to benefit from the comparatively low fuel prices. Not only the end of the double-digit growth rates are creating new challenges for auto sales in China. The dynamic boom of the Internet and its business models hit the providers.

Sales initiation via the Internet

"In China there are already 650 million smartphone users," said Bratzel. "And quite unlike in Germany, for example, a high proportion of sales initiation in car dealerships takes place over the Internet, right through to the conclusion." Sales and service offers as well as online taxi-like services shot through the roof.

"The Internet penetrates the mobility world in China more dynamically than elsewhere," said Bratzel. The background is also that new car buyers from the premium manufacturers are on average 36 years old = " - in Germany, on the other hand, well over 50 years. And still a good two thirds (68 percent) of the buyers of a new car in China are first time buyers. Bratzel sees the German manufacturers under pressure. Just offering good cars and expanding sales networks is no longer enough. With car sharing, for example, offers are needed. Volkswagen is already checking that.

Several segment shifts

The growth of the middle class in the huge Asian empire is also causing a segment shift in the models in demand. Inexpensive SUVs are very popular. China market leader Volkswagen, for example, does not yet have this in its range. The Wolfsburg are currently experiencing an unusual lull in the country where they sell a good third of all cars. Group-wide China sales as of May were 1.1 percent below the previous year.

The low fuel prices in a long-term comparison increase car buyers' hunger for horsepower - similar to the US. "More and more vehicles with higher engine power are being bought, while alternative drives such as natural gas or liquefied petroleum gas and electric drives are degenerating into" wallflowers ", according to an analysis by the CAR Center of the University of Duisburg-Essen, which was available to" Welt am Sonntag ". On average, the new car engine power is 143 hp.

In China, the situation is mixed: "There is a certain perplexity there at the moment," said Bratzel. "The question is whether the drop in sales is just a temporary dent." In addition, the Chinese manufacturers would become more competitive. The requirement of the communist leadership for their cadres to buy more cars from domestic production also weighed on the success of western luxury brands such as Audi, BMW, Mercedes and Porsche. (dpa)