Author: Adrian De Riz
In China, you are what you drive
It is not unusual for Chinese grooms and brides to be chauffeured in a Bentley, Maybach or Rolls Royce, while their entourage follows in a uniform suit of upper-class vehicles. The same holds true for Chinese business executives, who expect and are expected to be driven in higher class cars. In many aspects of Chinese life, the car reflects a person’s “face”. This cultural importance of cars, together with the growth of the Chinese economy, creates a strong demand in the Chinese luxury car market.
The Chinese car market: different and too big to miss
Historically, the Chinese luxury car segment has been served by non-Chinese players from Europe, the US and Japan. Built in and for Western markets, these luxury cars were often not designed with Chinese customers in mind. However, for the past 10 years China has been the biggest car market, and will remain so for at least another decade to come. The Chinese car market has become a crucial battleground that these brands are not willing to give up.
Catering to the needs of Chinese customers means winning the market
For global car brands, product localisation can decide over success or failure in China. Audi serves as a great example for a brand that recognized this opportunity and acted on it. In Europe, the majority of executives drive themselves to work. Therefore, the driving experience behind the wheel often dictates the purchasing decision. Chinese executives, on the other hand, are driven to work by their chauffeurs. Aspects of driving the car are secondary to the perceived comfort in the back of the car. The following chart shows the relevance of various interior components in executive cars and sedans as distilled from discussions in Chinese social media:
The backseat is clearly the most relevant component for executive cars, while front seats are more relevant for sedans. Additionally, maneuvering constraints and parking problems from excessive car length are less of a concern than it would be in Western markets.
Understanding these differences in customer needs, Audi focused its product development on the customer experience in the back of the car. In 2005, it introduced their first products designed exclusively for the Chinese market: the Audi A6L and A8L. The two models explicitly target the Chinese executive segment with enlarged wheelbases of up to 30cm. This additional length is applied in the back of the car, allowing for more leg space and room for movement. Additionally, Audi used the finest materials and accessories, normally found in the front row, and moved them to the back.
The result: a Chinese champion in the executive car segment was born. A6L sales compared to the base model soared by 27% in the first quarter. It took competitors half a decade to close this product development gap. The following chart shows sentiments for A6L seats and overall model perception, compared to sentiments for the competing products by BMW and Mercedes Benz:
A6L manifests the best sentiment both for the back seat and for the overall perception of the product.
In the end, customer centricity wins
By recognizing the cultural context and tailoring their product accordingly, Audi was able to design a car that perfectly addresses the requirements of the Chinese executive car market. This insight of the relative importance of front and back seat made Audi the trendsetter. Listening closely to the needs and wants of the local target group, the brand became the #1 choice among Chinese executives and gained a competitive advantage of several years.