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Younger consumer demographic requires different branding strategy

Automakers are increasingly adopting different strategies to cater to young consumers, especially the “post-90s” generation, according to several OEM executives who spoke at the forum.

“Consumers that are born in the 1980s and 1990s are becoming mainstream car buyers in the Chinese market,” said Takahiro Hachigo, vice president, Honda Motor (China) Investment Co., Ltd. and Honda Motor (China) Technology Co., Ltd. “This consumer segment accounted for half of the new car buyers in 2013 and is expected to take up 70 percent of the market by 2020. They are the driving force.”

Hachigo, who predicts China’s auto sales to reach 35 million units in 2020, stressed the importance of Honda’s changing actions to develop cars locally in China, for China. The Japanese automaker is utilizing common platforms for different customer needs and focusing on developing models suitable for China. The upcoming Dongfeng-Honda XR-V and GAC-Honda Vezel small SUVs, for example, are exclusive models for the Chinese market, equipped with Honda’s new generation of powertrain adopting “Earth Dreams” technology. Honda’s VTEC Turbo and Sport Hybrid technologies will also be rolled out in upcoming locally produced models.

For luxury car brand Audi, the brand communications is no longer about technology, according to Liu Zhanshu, director of strategy & operations management at FAW-Volkswagen’s Audi Sales Division.

“We have discovered that as consumers get younger, they are not as interested about technology communications. If we overdo it, it would make the brand ‘cold’ and too rational,” said Liu. “The post-90s generation is becoming more open, individualized and trendy. They represent the future and we have to communicate about the future.”

According to Liu, one major area that Audi plans to focus in its future communications in the Chinese market, in addition to technology and experience, is people. “We will redefine the image of Audi owners to thinkers, innovators and leaders,” said Liu.

The way consumers access product information has changed dramatically, according to Ye Lei, deputy director of marketing & sales at Dongfeng-Nissan Passenger Vehicle Co. “More than 70 percent of Chinese consumers use the Internet as the primary medium to get access to product information,” said Ye. “They go straight to price negotiation because they know all technical specs of the car they want to buy from the Internet.”

Dongfeng-Nissan, according to Ye, has therefore utilized digital marketing extensively both at the headquarter level and down to the dealer level. But Ye cautioned that it is unrealistic that the Internet replaces the entire burying process.

Liu echoed Ye’s comment, but added that OEMs must embrace the Internet in transforming their sales and marketing channels. Audi, for example, has established a digital marketing department and integrated its CRM function so that more precise customer data can be accessed. It has teamed up with Chinese e-retailer, for example, for the promotion of the Audi A3 where buyers can receive gift packs.

Branding has to be global but has to cater to different markets, according to Steve Rad, vice president of marketing & customer management solutions at IH Automotive. “It is a global business and needs to be consistent across markets, but the tone, voice or communications should be different,” said Rad. “Consistency is at the core of the brand. It has to be relevant, and the easier it is for the consumer to think of something directly related to the brand, the stronger the brand is likely to be.”

For Venucia, Dongfeng-Nissan’s joint venture independent brand, the image will be about enjoyment, while Nissan will focus on passion and excitement, according to Ye.

“Consumers now emphasize more on their individuality and interests. Venucia has an entirely different positioning than Nissan and now we need to make it more well-rounded and distinct,” said Ye.

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