Changing consumers, different perceptions

By: Linda Luo   2010-02-04

Since it hit the road last October, the sixth generation Golf has registered sales of 7,218 units in four months.

This is a sharp contrast with the sales waterloo of its predecessor, the fourth generation Golf, which maintained monthly sales of only dozens of units in the last six years. Failure of the Golf has been a stain in the marketing history of FAW-Volkswagen. Consequently, when the joint venture planned to introduce the new generation Golf, industry analysts doubted if the successor could walk out of the big shadow.

The old Golf was believed to have arrived in China at a wrong time. In the year of 2003, car buyers were mostly government institutions. A car was more of a status symbol than a vehicle of transportation. Large-size, rigid-looking sedans like the Santana 2000, dominated the market at that time. And individual consumers would prefer a much inexpensive compact sedan such as the Xiali than a compact hatchback sold at more than ¥110,000.

Things are changing as China becomes the world's largest auto manufacturing country. Hatchbacks are more welcome to younger consumers who have a difference perception of the styling and utilities of their first cars. Among the six different variants, the 1.4 TSI Premier seems to be the most popular as the model brings Volkswagen's state-of-the-art turbo engine technology. Rich technology content, gas efficiency and new styling are becoming more attractive to a new generation of Chinese consumers.

People who were born in the 1980s are now regarded as the main force of automobile buyers in the future decade. This generation pursues uniqueness and wants to show their peculiar tastes through their cars. They pay more attention on styling and personal experiences when choosing a car model. That partly explains the hot sales of fashionable-looking cars such as the Mazda and Peugeot among Chinese young.

Realizing the rising demand of Chinese consumers, multinational carmakers are increasing treating China as an important market to launch their new vehicles. PSA launched a world premier car, the Peugeot 408, in China days ago. It was the first time that PSA held a world debut for its newest generation car in an overseas market in the history of the French brand.

The diversity of the Chinese market offers opportunities for all the automakers, both multinational and domestic brands. The key of survival and success is to feel the market pulse and launch the right products for targeted Chinese consumers.

However, market fundamentals should not be forgotten. High performance-to-price ratio will still be the most important factor for a Chinese consumer to choose a car. And in that respect, it remains to be seen if the new Golf will continue with its current sales momentum in the future as the pricing range of the new Golf does not offer it much competitiveness in terms of the price-performance ratio.