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Luxury brands tapping youth market

  • Source: CE.cn
  • [14:26 January 20 2011]
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On August 23, Audi A3 Sportback officially marched to Chinese market. Since its unveiling ceremony in 1996, this type of young and fashionable car has achieved 2 million sales worldwide. No doubt that this is a successful fine car, but obviously, it came into Chinese market late. The reason is very simple: the mature Chinese marketing environment is a must for its appearance in the name of Audi and now it is the right time. 

It is a tendency that luxury brands focus on young customers and are lowering their thresholds. For the consumers, the purchasing price of small displacement car of luxury brands stays lowest in their whole product system but these cars do possess the features of rich connotations and sophisticated manufacturing process, the same as luxury brands.
 
Consequently, it becomes the choice of more and more young consumers. The displacement of the launched Audi A3 Sportback is lowered to 1.4T, and the starting price is fixed at RMB268 thousand yuan. Moreover, this type of car has 14 different body colors and 7 interior color schemes for its would-be consumers, showing the pursuit to embrace young customers.

It should be seen that previously the reason for luxury cars of big space and displacement being well received attributes to the fact that people hope to show their identity and status, whereas, with the gradual maturity of Chinese vehicle market and the increasing national revenue, the consumption concept is changing and particularly, the number of young ambitious customers is largely increased. So the luxury automobile enterprises must enrich their products and stretch to entry-level version and small displacement cars.

Judging from current market conditions, BMW 1 series, Mercedes Benz B and Audi A3 Sportback are rivals. BMW 1 series first marched to Chinese market in June 2008. After two years cultivation, A-class luxury cars have got some supports. On the Audi A3 launch ceremony, Tang Mai, General Manager of FAW Audi Sales Division, released the following data: the Chinese market size of luxury cars has increased to 2,089 per month in July 2010 from 513 per month in August 2009. Luxury small car has shown a tendency of high-speed increase this year and the capacity of this market will be up to 20 thousand next year.

Some one may think it is not worth to buy a 1.4L small car at the cost of 268 thousand yuan, with which a China-made luxury car of joint-venture brands such as hottest Tiguan and Accord can be bought. Nevertheless, the mature automobile consumer market shall feature diversification; in addition, many luxury brands follow the suit and lower their thresholds to cultivate this potential market deeply. For example, in purchase link, the luxury brands are more approachable for young consumers because of the emergence of "zero interest".
 
Ms. Wang, the owner of a BMW 120i car, sold her first car at the price of 100 thousand yuan, and when bought her second car, she chose the BMW zero-interest scheme by which she paid 45 percent of the total 273 thousand yuan for a down payment and enjoy "zero monthly payment", "zero interest" and pay off the outstanding balance next year. It can be seen that "precision marketing" adopted by luxury brands has begun to function and is attracting more young consumers to agree on the idea - "purchase of luxury brands marks a new way of life".  

With the competition in the luxury small market becoming increasingly fierce, a new round in this market will be started soon and many models including Audi A3 are carrying out feasibility analysis on localization. Luxury brands are developing small displacement market and the localization will bring about cost reduction. Concerning this, many domestic automobile enterprises, especially those self-owned ones, shall take countermeasures since fairly large shares of the superiority market will lose to luxury brands thereby.