Mark Tanner describes a gigantic new phenomena in China, the realisation of the dream of owning a car. The numbers are huge and the shift just starting. This will also change the desires of Chinese tourists

By Mark Tanner*

There are now more automobiles in China than there are people in every other country except India – a cool 430 million. Ninety cities have more than one million automobiles. Although the country doesn’t yet have the ownership rates of developed countries, the dream of owning a car has well and truly arrived for the masses of China’s middle class.

Beijing has continually introduced new policies and support for both the supply and demand sides of the industry. This has driven consumers to buy more cars, while supporting the local auto industry, creating the world’s biggest and fastest growing country for auto exports. 50% more Chinese-made vehicles were shipped overseas in September than a year ago.

To continue to spur the demand, Beijing’s automobile initiatives are spanning wider and more holistically in a local industry which still has some maturing to do. Its latest initiative involves seven policy measures assisting the auto “aftermarket.” This includes greater support in areas such as the car parts ecosystem, car purchase financing, cars at camping sites, auto museums and even drive-in movies. Classic car lovers should expect global prices to increase as Beijing plans to improve import policies and support.  

The impact of Beijing’s support for, and Chinese consumers’ enthusiasm about automobiles stretches far beyond car companies, panel beaters and F1 paraphernalia. The implications also present opportunities to retailers and brands spanning many industries. This is particularly relevant to foreign brands whose target market typically aligns with the demographics affluent enough to buy a car.

For retailers, their customers’ increasing access to cars means families are likely to be more open to big box retailers selling larger-format products in some categories. This is reinforced by the many car owners who live less centrally in larger homes with more room to store things. 

In addition to the size of products, food & beverage products could do well providing car-optimised formats, allowing folk to consume and dispose of their products in a way that works with being in a car. Similarly for beauty brands, who may find more of their customers wanting to apply their makeup in the car. There will likely be growing niches for everything from luxury accessories to shoe brands, servicing a consumer increasingly behind the wheel.

The return of Chinese tourists will see more travellers looking for self-drive holidays, and communications and operators should cater for them.

Unlike consumers in the West who have owned cars for generations, car ownership is relatively new for many Chinese, so it can be more meaningful. For any marketers, ads and collabs related to cars may connect with Chinese consumers with a subject that is dear to them. And for more sophisticated brands, integrating your brand into a car-friendly app or service may make the customer journey more frictionless for consumers, particularly as more Chinese-made cars become fully integrated with smartphones.

*Mark Tanner is the CEO of China Skinny, a marketing consultancy in Shanghai. This article was first published here, and is re-posted with permission.