1. China represents a major opportunity for luxury car brands due to its large population of wealthy consumers and fast growth in luxury car sales over the past decade. 2. Early success in China was driven mainly by status display, but Chinese consumers now seek luxury cars for additional benefits like refinement and expertise. 3. To succeed in China, luxury brands must build trust, address Chinese tastes for new models, innovate for local needs, deliver excellent customer experiences, expand their customer base, maintain exclusivity, and continually listen to Chinese consumers.

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Opportunity and success for Luxury brands in China
Guillaume SAINT – Managing Director – TNS Automotive APAC

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中国…the largest reservoir of wealthy “consumers”
2

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中国…A land of opportunity for Premium car brands
3

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中国…10 years of growth for Luxury brands
4
Premium Luxury brands : Faster growth compared to mainstream
111
168
221
305 310
461
593
701
833
1,030
3,268
4,401
5,482
5,980
8,723
11,935
13,071
14,225
17,407
19,709
0
5,000
10,000
15,000
20,000
25,000
100
200
300
400
500
600
700
800
900
1,000
1,100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Luxury car sales
PV total
1,000 unit
3.4%
3.6%
5.2%
Source: LMC
% share of
Premium

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中国…Also the most battled market
5
1. All brands available 25 +
2. Extended model range 150+
3. “New Launch” driven market
4. No loyal customers
5. High sensitivity to failure
6. Etiquette more than experience

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Success in China for Global business hinges on your ability to
understand its complexity
4

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Early 2000’s -
7
Owning a car
Status
Luxury cars imported…
Status and Wealth
1.5 Million passengers cars sold annually = less than 7 cars per 1.000 hab.

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When status-display was almost the sole motivation…
5
Source : TNS NeedScope China 2003
Strong brand
awareness
Traditional
Luxury
High price
Extravagant
Grand - 大气
Distant from
the mass

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Early 2000’s - Weakly discernable brand image
9
The ABB family
All addressing Status need states :
Numerous similarities…
• German Engineering
• High Awareness China and WW
• World Class Quality
• Prestigious
• Authoritative - Leading
• For Respected Admired people
Very few differentiating assets :
• Audi : No real diff dimension
• Benz : Lux heritage. Success. Classical.
• BMW : Proud. Ambitious. Driven
Source : TNS NeedScope China 2003

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2015…15 years later
10
18 Millions Passenger Cars sold in 2014 … close to 90 cars per 1.000 hab.
Owning a car
1 of the 5 “must-have”
Luxury cars
Status but…

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Evolution of Luxury Auto China
11
Webelongtosame
VIPgroup
Meabove
others
Introversion
Extroversion
Traditional Luxury
Higher
differentiation
1.
Refined self
rewarding
2.
Connoisseurs
3.

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Always at the forefront of luxury …
5
Strong brand
awareness
Higher
differentiation
High price
Pioneering
Uniqueness
Distant from
the mass
1.

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Always at the forefront of luxury …
5
Strong brand
awareness
Higher
differentiation
High price
Pioneering
Uniqueness
Distant from
the mass
1.

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Pursue exceptional self-gratification experience …
5
Sophistication
Refined
Self-rewarding
High quality
Inner experience
Feelings
Refinement
2.

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Pursue exceptional self-gratification experience …
5
Sophistication
Refined
Self-rewarding
High quality
Inner experience
Feelings
Refinement
2.

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From usage to expertise and passion…
5
Sophistication
Connoisseurs
Outstanding
experience
Long heritage
Trusted
reputation
Share only with
selected mates
3.

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From usage to expertise and passion…
5
Sophistication
Connoisseurs
Outstanding
experience
Long heritage
Trusted
reputation
Share only with
selected mates
3.

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1. “Long History, premium heritage“
What if no long history in China ?
Being successful in China in Luxury Car Market

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2014 is the 50th anniversary of
China-France diplomacy. As an
important station of Charles de Gaulle
presidential vehicle exhibition, there
is an independent booth in Shenzhen
auto show to exhibit the legend
presidential vehicle DS19 which
saved Charles de Gaulle in an
assassination 50 years ago and
witnessed the 50 years friendship
between China and France.The legend and classic model receives great attention and
becomes a most attractive and distinctive booth in
Shenzhen auto show.
Source : DS.COM.CN
1. “Long History, premium heritage“
Being successful in China in Luxury Car Market

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2. “Trusted Brand“
20
Food
scandal
Collapse of
new building
Fake cars
Fake parts
Being successful in China in Luxury Car Market
Collapse of
new road

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Being successful in China in Luxury Car Market
2. “Trusted Brand“

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Being successful in China in Luxury Car Market
22
3. “Address Chinese’s appetite for Newness“
BMW : X4, 4 Series, 2 series, 2 series Active Tourer
Mercedes : GLA, GLC, CLA… and S Class
Porsche : Macan
Infiniti : Q50, Q60 localized, and Qx50
Create events/news all along the life cycle of successful models
H1 2015 : Successful selling models

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Being successful in China in Luxury Car Market
23
4. “Innovate according to Chinese needs…“
Initiated for Chinese executives buyers, adopted more widely…
Extended wheel base : 15 cm more legroom
Rear Executive Lounge Seating Package
• 42.5 degree back rest inclination
• Electric fold-out footrest
• 90 mm forward slide of Passenger seat
• Electric adjustment entertainment syst
• 7 inch Touch Command Tablet
Back seat comfort in BMW 7 Serie Li

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Being successful in China in Luxury Car Market
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Source : TNS Car 360 2014
5. “Deliver High-end experience all along the car
life-cycle…“

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Source : TNS Connected Life 2014
Potential drivers are massively Connected. Much more than
marketers…limiting the opportunity to effectively engage with
target appropriately
Being successful in China in Luxury Car Market
5. “Deliver High-end experience before the
Purchase…“

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5. “Deliver High-end experience during the
Purchase…“
Source : TNS TAPPS China 2013
Sponsoring TV & Radio
Expert opinion
Car brand Website
Dealer follow up3.5%
0.1%
3.5%
2.3%
2.7%
Family & Friends 3.7%
3.5% Contribution to the Brand preference
Enhance the attention to…
Dealers, still a critical point in the buying process
CAR
DEALER
VISIT
Being successful in China in Luxury Car Market

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5. “Deliver High-end experience during the
Purchase…“
Source : TNS Showroom Studies
Discrepancy between Brand Premium Image and Show room environment
Being successful in China in Luxury Car Market

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5. “Deliver High-end experience during the
Purchase…“
Being successful in China in Luxury Car Market

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5. “Deliver High-end experience after the
Purchase…“
Very often provide services far below Luxury buyers’ expectation
Source : TNS various Cust Sat programs
“The food is awful. There’s no place to sit down. The 4S store is too
stingy to even provide hot water and the services are really bad… As a
matter of face, their services are no better than those who sell cars
only valued RMB 50,000 like QQs.”
“We hope to have a stable counselor instead of constantly meeting
new faces and hearing their re-introductions. Employees’ loyalties
will certainly affect the brand image. So does the sense of
security and reliabilities that customers want to feel in here.”
We’ve never got any feedbacks for what we’ve asked. I have to say
that choosing [Super Luxury brand] is my most regretful thing in my
life. …We got stuck in them because other 4S stores are too far away
from us. We suppose [Super Luxury brand] should provide attentive
services due to their upscale brand image and high charge
Being successful in China in Luxury Car Market

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Upgraders with
lower income
6. “Extend the customer base…“
Journey
to the West
Younger, more
individualistic drivers
 Middle Class
expansion
 More affordable
models
 Pre owned car service
 Tier 1-2 : sales and
usage constraints
 Tier 3 & Tier 4 cities
: growth driver
 Network expansion
 Younger generation
 More independent
aspirations
 Open to different
products & services
Being successful in China in Luxury Car Market

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6. “Extend the customer base…“
YTD 07/15
Macan 15,977
Cayenne 13,424
Panamera 4,628
Boxster 769
911 690
Cayman 660
918 8
Source : LMC
Classical Luxury Brand
Attractive ext design
Premium Brand
Fun to drive
Sporty
Seductive Brand
Relative Image profile
compared to 18 premium car
Brands*
Source : TNS Premium Brand Tracker China
* Ferrari, Lamborghini, Mazerati, Aston Martin not included
81% SUV
+24
+16
+13
+11
+11
+11
Being successful in China in Luxury Car Market

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7. “Nurture exclusivity…“
Marco Polo Red body colour, golden dragon graphic on the front bonnet, gold and black livery
stripes symbolising a racing track, gold painted wheels, gold aeroelastic winglets, gold
embroidery on the car's head rests, engine start button inscribed with the simplified Chinese
characters for 'start' and a '20th Anniversary Special Edition' plaque in dash.
Source : TNS The Luxe Edition
Being successful in China in Luxury Car Market

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8 clues for Luxury Auto growth in China
33
1. Build an undisputable trusted reputation
2. Leverage Long History
3. Address Chinese’s appetite for Newness
4. Innovate according to Chinese needs
5. Deliver High-end experience all along Customer experience
6. Extend customer base
7. Nurture exclusivity
8. Never stop listening…

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