In just a few years, China has become the second-largest market in the world (after the United States) in the automobile sector. A growth of 4% in this sector is even planned in China for the year to come.
What is a connected car?
Since China achieved its goal of becoming a world economic power, the country wants to develop its most remote provinces. As they have not enjoyed the same benefits as coastal regions during China’s modernization and thus remain very poor. However, these regions promise to enrich themselves and should then also modernize themselves in the years to come. Therefore, the car market should continue to increase in China in the next years, because the number of car owners in these provinces is much lower than in major cities. But as their purchasing power should rise, a whole new part of the Chinese population will be able to buy a car. But with more than 600 million smartphone users in the country, a particular sector of this market promises to be in vogue: connected cars.
The connected cars are different from the other basic ones mainly because of their access to the Internet, which is offered by their communication system. It allows the driver to connect his smartphone to the car, but also the car itself to connect to surrounding cars and infrastructures. Passengers can, therefore, benefit from extended services, particularly through apps. Those connected cars consist of 6 essential points:
- Mobility management (travel assistance, traffic information)
- Vehicle management (real-time vehicle status information)
- Safety (prediction of a dangerous situation)
- Driver assistance (cruise control on the highway, assistance to park)
- Entertainment (games, music, social networks, internet)
- Well-being (detection of fatigue, medical assistance)
The connected car market is expected to increase by 50.9% per year in China.
China: land of innovation
Indeed, the Chinese are very fond of new technologies. Compared to Europe, they are much more open to novelty and love innovative gadgets. So in a market like the one of automobile connectivity (which should bring 123 billion euros by 2021), the weight of the Chinese in the balance will surely be huge. The customers that are targeted are part of the modern and connected urban youth. The Chinese around thirty grew up in an environment more open than their parents. They thus developed other consumption habits: save less, spend more on leisure, and value quality over quantity. They are particularly interested in having Wi-Fi and a touch screen in their car, to access connected functions such as interactive maps (for navigation assistance) and access to entertainment (information sites, networks social, streaming music).
On one hand, they want these gadgets for their convenience. Because the map can be useful to find the fastest way from point A to point B (which is really useful in big cities) and the entertainment is very enjoyable for them to be less bored in the traffic jams (that are long and inevitable). But they also always want to be at the forefront of technology. In big cities, most of the population is addicted to digital resources and social networks. As for the wealthiest part of the population, they are willing to spend a lot of money to be the first to have the latest gadget in vogue. The image and opinion of others matter a lot in China, that’s why they always want to have the best and the latest technologies. Thus, connected cars are fully in line with the expectations and desires of Chinese consumers.
The latest gadget in the connected cars
Apple with its “CarPlay” system and Google’s equivalent with “Android Auto” is beginning to overwhelm the automobile connectivity market. However, the Chinese market is very different from the rest of the world. This is why it requires adaptation, otherwise, success is impossible. In addition, Google is censored by the “Great Firewall of China”, as well as other websites and social networks. The way is then free for the Chinese leaders: Baidu, Alibaba, and Tencent.
Baidu has launched its “Baidu CarLife” system. It is comparable to the ones of its US competitors but is much more suited to Chinese consumers. Among other things, it allows users to make phone calls, listen to music online and use the “Baidu Maps” app to find their way around. It is the current market leader in China. Volkswagen, Hyundai, and GM have already succumbed to this service. Audi works with Tencent, the operator of WeChat, the application most used by the Chinese. The third Chinese giant, Alibaba, is collaborating with PSA.
We must, therefore, focus on the Chinese market and understand its consumers before entering it. Though the market exists and is promising, it is not enough to succeed. To learn how to negotiate with the Chinese, please click here.
If you still need help and additional information to enter the Chinese market, then feel free to contact Gentlemen Marketing Agency. Our team of professionals is here to help you make your project come true.