Auto brands driving buzz

China’s automotive sector has been the one bright spot for global manufacturers in what will be remembered as one of the worst years in history. While the recession prompted the rationalisation of a 100-year-old industry, including the hurried demise of Saab and restructuring of General Motors (GM), the appetite for new vehicles in China just keeps growing, fuelled in no small part by digital marketing.

“Most dealers in China report a 30 per cent drop in test drives and that is in part due to the importance of online in product purchase,” says Bryce Whitwam, GM of Wunderman China, which works with Ford. “Nowadays more and more people literally walk right into the dealer and buy the car - the result of knowing exactly what they want.”

The mainland became the world’s biggest market for new cars earlier this year, with consumers buying an additional three million vehicles more than their counterparts in the United States last year. The China Association of Automobile Manufacturers (CAAM) said its members shipped a total of 13.6 million vehicles in 2009, a 46 per cent jump on the year before. Tax cuts and subsidies have boosted shipments a further 63 per cent in the year to March.

A major factor behind the boom is the wider growth of China’s credit culture. Research from leading auto industry marketing group Sinotrust found that while just seven per cent of cars were financed by loans in 2007, anywhere between one fifth to a quarter of new cars will be bought on finance this year.

Publicis Beijing planning director Heidi Zhang says the current generation of car buyers “wants it all and wants it now”. Understanding that psychology is crucial for marketers, she says, pointing to Mini as an example. The accessibility of this aspirational brand, whose most basic model costs over US$30,000, has improved with the introduction of an instalment repayment plan and cheap financing scheme.

This approach from car brands has in turn led to a rise in online adspend, with digital platforms playing an important role in further increasing accessibility. $40 million was spent online in China in March, and automotive advertising accounts for nearly a fifth of all display advertising, according to CPM data from Nielsen, making it the second biggest category after fashion.

According to Nielsen China director Georgia Zhuang, research shows online to be among the most important sources of information for consumers looking to buy. “The key point is that people are using the internet at all stages of the purchase decision making process. TV commercials and magazines are complementary but aren’t involved in the decision making cycle.”

Whitwam explains that digital media is predominantly used for product education. “But we’re seeing digital media increasingly used to build awareness as well, particularly in social media,” he says, explaining that Ford relied heavily on social media to promote the launch of its Fiesta model in the market last year.

Digital is appealing to what Fareeda Cassumbhoy, national planning director at Bates 141 China, calls the “third generation” of car buyers - the post-80s generation in the market for their first purchase. It’s a demographic marketers are chasing with vigour.

“We are witnessing a dramatic growth in digital spending, from the previous 1 to 2 per cent of total budget, to 12 to 15 per cent,” says Jesse Lin, managing director of DDB China, which works with Shanghai Volkswagen. “Particularly in China, with over 320 million netizens, digital has become a must-win battle ground for car brands.”

Sam Flemming, chief executive of CIC, a Shanghai-based firm specialising in tracking online brand chatter, states that Chinese consumers are unusual in that they are often first-time car buyers with no first-hand experience of the sector. However, he adds that having taken the path to purchase, there is a good chance that they will be become firm advocates, if not outspoken fans, of their chosen brands.

Flemming, whose firm monitors about 80 different manufacturers and over 450 models across 13 million online conversations each month, says there are two main ways that automotive brands have set out to build their online voice.

One is by participating in the already dynamic community forums that have emerged to enable owners to discuss the features, merits and shortcomings of their own vehicles; the other is by establishing their own communities on their corporate website or on designated online destinations, as BMW has done. Top sites such as xcar.com.cn and autohome.com.cn demonstrate near fanatical support for brands from consumers, and their online forums are widely regarded as reliable and persuasive sources of information.

Forum discussions range from the colourful to the mundane. Between last December and February, appearance was the most actively discussed automotive attribute, according to CIC data (see chart). This is perhaps unsurprising in light of Cassumbhoy’s assertion that the car in China is “no longer a mode of transport, but about fulfilment, and increasingly seen as an extension of the owner’s personality”. Traditional high-ranking concerns among Western consumers - qualities such as safety, level of service and upkeep - are far less important.

The most active participants on these sites are usually opinion leaders.

“Their opinions are especially important to the brands,” says Zhuang. “The majority of consumers are first-time buyers and they would rather trust their colleagues and friends than the dealerships.”

Interestingly, Zhuang claims that these consumers are not adverse to being steered in their conversations by marketers and public relations experts, provided that the discussions remain genuine.

“There is no real negative emotion that I have observed,” she says. “They understand that marketers might be involved but they can usually discriminate [between real and seeded conversations]. They are very rational.”

The fan-club nature of these tight-knit communities has spilt over into the real world with ‘car clubs’ - groups of enthusiasts who hold ‘show and shine’ sessions on a regular basis to share their passion. A recent phenomenon, car club members tend to be vocal defenders of brands and hence powerful groups to harness.

“All the car companies are trying their best to engage the club culture,” says Whitwam. “On one hand, they see it as a big opportunity, but on the other, they don’t want to destroy its grass-roots culture. I think the opportunity is how to best support and how to monetise the relationship, driving owners to service and repeat purchases.”

Bates141 tapped car enthusiasts in its work for GM’s Buick brand. Light-hearted creative work for the Regal Turbo enjoyed viral success online. Seeded onto top social networks, the clips drew 17 million views in the first ten days. Experiential marketing has also seen success for the brand, with the S-Curve Challenge, a nationwide campaign taking the form of a 20-city race.

Indeed, digital is not the only platform having an impact on relationships with consumers. At the top-end of the market, some luxury brands have taken courting interest groups to new levels. The Jebsen Group is the oldest Porsche dealership in Asia and operates showrooms throughout Greater China. Derek Tong, GM of Porsche Centre Hong Kong and Macau says the group’s sponsorship of a motorsport team is central to its marketing. This includes premium hospitality at Formula One events and driver training for owners.

“Our experiential marketing programme is important because motorsport is an integral part of the Porsche heritage, car development and overall brand identity,” he says. “There is an aspirational value and as many customers are motorsport enthusiasts, there is emotional attachment as well.”

The depth of the battle brands are fighting to find a voice in the Chinese market reflects the extent of the opportunity. That interactive channels are resonating beyond traditional above-the-line advertising with the core of enthusiasts is not surprising.

For Lin, the message for car manufacturers is uncomplicated: “Those who dominate the public opinion will win over the market.”

What Chinese consumers are talking about online

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This article was originally published in the 6 May 2010 issue of Media.