Jin Bo
Dec 16, 2010

Real opportunity for auto sector lies in lower-tier cities: Nielsen

SHANGHAI - Industry insiders who attended the Nielsen China forum, held in Shanghai Tuesday, said private vehicle ownership is still very low despite of years of high-speed growth, and the number of first-time buyers will skyrocket in the next couple years.

Real opportunity for auto sector lies in lower-tier cities: Nielsen

"Car owners in cities like Shanghai are starting to trade up — good news for luxury models. But the real opportunity lies in tier two, three and four cities," said Shirley Ng, director, client leaders, automotive at Nielsen China.

Ng said manufacturers and retailers must understand the differences between the needs of consumers in lower tier cities compared with those in tier one cities, and noted that advertisers must approach these price sensitive consumers "creatively" by focusing on brand building for the long-term.

Georgia Zhuang, director, consumer research at Nielsen China, said consumers in lower-tier cities tend to be older than those in tier one, and their families are their top priority.

"Auto manufacturers and retailers need to market toward these consumers by finding the emotional linkage with their priorities and satisfying their basic needs," said Zhuang, adding that companies focusing on lower tier consumers would do well to emphasize fundamental themes such as durability, safety and simplicity.

"These consumers have little experience with or knowledge about cars and have limited information, and their purchase decision making is relatively simpler and quicker," said Zhuang, "Manufacturers and retailers should use a range of media including the Internet and social media as well as physical displays at various locations. Dealer network expansion and training of the sales and service associates will further enhance brand visibility and reputation - key factors important to lower tier consumers."

Source:
Campaign China

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