2015 China Auto Marketing and Communication Review

China Auto Marketing and Communication Report
2015年中国汽车市场营销和传播趋势报告

Pit Stop for a New Race
Since 2002, China has been the fastest growing automotive industry in the world. Numerous international
carmakers collaborate with Chinese counterparts to participate in the atrocious race on performances and
technologies, hoping to secure a larger share in this lucrative market. Facing the growing governmental
restrictions and the shrinking market demand, it is time for carmakers to enter the pit for strategic
adjustments and to get ready for the next race to begin.
As a leading global automotive marketing agency, Havas Worldwide (灵智精实整合营销传播) has assisted
many international and Chinese carmakers to grow steadily and rapidly in China. In this report, we have
forecasted the 2015 trend in Chinese automotive industry based on our professional insights from market
and communication in 2014. As the first agency to devise trend forecasts exclusively for the automotive
industry, we wish to assist carmakers to get ready and win the next race.

1151.2
280.8
130
1208.8
381.9
184.2 Y2014 Y2013
Rocky RoadAhead, Market GrowthSlowingDown
The world’s largest automotive market, China, is
finally cooling off after years of high speed growth.
Growth in new car sales has slowed significantly
with sales grew 13.4% of 2014, down from 20.7%
growth in the year earlier, according to China
Association of Automobile Manufacturers (CAAM).
Source from China Passenger Car Association (CPCA)
The sedan segment has taken up an impressive market share of 66.7% in 2014, achieving a sales of
12.09 million units. The growth rate, however, is not as promising. Sales has only grew by 5% in
comparison with 2013, making the segment brutally competitive. Despite the growing feebleness of the
segment, it is still where manufacturers make the most profits from.
MPV and SUV, on the other hand, have proved strong growth potential with outstanding growth rates of
41.7% and 36% respectively.
1293 1561 1771
Y2012 Y2013 Y2014
20.7% 13.4%
36%
41.7%
5.0%
MPV
SUV
Sedan
2012-2014
Chinese Passenger Vehicles Market Growth Rate
2013-2014 Chinese Passenger Vehicles Market Growth Rate (By Segment)
unit（10,000）

Another Bitter Winter For Japan Carmakers InChina
Facing the political tension between Beijing and
Tokyo, Japanese carmakers have resorted to a
rather conservative approach on market expansions
and model launches in China. Thanks to many years
of high product awareness, the 2013 sales was still
remarkable.
However, under the twin challenges of rising political
tension and slowing Chinese economy, major
carmakers downward adjusted yearly sales target in
2014 Q3. Yet, with best-selling products losing the
halo to make basic sales contribution, none of the
Japanese manufacturers succeeded to meet the
target. The market growth rate in 2014 is far from
satisfying.
2014 is a product launching year for the Japanese
brands, a fruitful of popular models such as X-
TRAIL, Corolla, Levin and XR-V were launched in
China. New products, however, made little
stimulations to the general sales. The gains could
hardly fill the gaps from the severe drops of the older
products, not to mention boosting the growth rate
further up.
凯美瑞_Camry 汉兰达_Highlander 逍客_Qashqai 天籁_Teana CR-V_CR-V 雅阁_Accord 马自达6_Mazda 6
Y2013 177649 95216 124589 106220 189972 118920 93374
Y2014 150311 84490 87448 109290 168184 108487 61636
-15.39%
-11.26%
-29.81%
-11.47%
-8.77%
-33.99%
+2.89%
5.67%
5.67%
5.57%
5.18%
4.81%
4.58%
1.22%
1.05%
Y2013 Market Share
Y2014 Market Share
2013-2014 Sales of Major Japanese Products
2013-2014 Market Shares Of Major Japanese Brands

-0.04% -0.32% 0.02%
-4.21% -3.91%
-3.35% -3.42%
-4.24%
-3.04%
-2.00%
-1.28%
0.00% -0.15%
0.29% 0.10%
2.61%
3.83% 4.16%
Chinese Carmakers Feel The Pinch
Chinese carmakers suffered heavy losses in market
share due to their poor performances in the compact
car segment. Consecutive declines can be observed
in the first half of 2014, yet the rebound in July is
proven to be a sign of market recovery. Domestic
carmakers wrapped up with a total sales of 7.57
million units in 2014, making a growth of 4.1%. The
market share of 38.4%, however, is not as pleasing
as it is a 2.1% drop from 2013.
Chinese carmakers are doing well in the SUV
segment. With its more affordable price and
seemingly larger size, consumers who do not value
brands and are tight on budget tend to perceive them
as a more cost-effective option.
Chinese SUVs have achieved an impressive sales
of 1.89 million units in 2014, a 50.9% jump from
2013, much higher than the 37.1% growth of the
overall SUV segment. Interesting enough, many top
selling SUVs are the only major source of sales for
their brands.
28.6%
CS35+CS75
49.5%
TIGGO 3+ TIGGO 5
15.3%
GX7
25.0%
S6+S7
65.2%
GS5
100%
Sales in SUV vs. Overall Sales Of Selected Chinese Brands
2013-2014 Market Share YOY Growth Rate of all Chinese Brands
2013年7月
2014年2月
2014年8月
2014年12月

The Staggering Premium Market InChina
More-affordable premium brands such as Audi,
BMW and Mercedes cater to the growing middle
class by introducing more competitively priced
models. A3 by Audi, 316Li by BMW, C180 by
Mercedes. These more economical models
expand potential customer pool further by
attracting the more price sensitive individuals,
making luxury affordable.
As target consumers are getting younger, second-
tier premium brands such as Jaguar, Infiniti and
Lincoln are gaining importance in China. Younger
consumers no longer look for cars that merely
prove their social status. They are looking for
models that truly reflect their unique tastes and
personalities. These “newer” brands took the
opportunity to offer models that differentiate the
owners from the crowd.
Audi
575.1 K
BMW
MB
Jaguar
LandRover
Volvo Lexus
Cadillac
Porsche
Infiniti
DS
456 K
282 K
122 K
81.2 K 76 K
73.5 K
46.9 K
30 K
26.7 K
Audi A3 MB C-Class Porsche Macan Infiniti Q50L Cadillac ATS Lexus NX DS 6WR
2014 Sales Ranking For Premium Brands / Illustrations Of Selected Newly Launched Models

Automakers Shove Cars DownChinese Dealer Throats
Source from National Information Center
Proactive Approach: Audi subsidized its dealers
2.05 billion yuan, facilitated a new business policy
and lowered the sales target for 2015
Passive Approach: In response to dealers' petition,
BMW announced to provide 5.1 billion yuan
subsidies to the dealers
Deadlock: Porsche continued to ignore its upset
dealers who were threatening to stop stocking.
Renault agreed to cancel inventory volume
assessment, but still did not mention anything
about subsidies.
In 2014, the operating pressure for passenger-car
dealers surged, 55% of dealers could not profit
from selling new cars. Merely 17% of dealers could
make profit in their very first year of operation.
The profitability of luxury-car dealers is even worth
concerning. Hardly any, in fact, 100% of luxury-car
dealers bear losses in the first year of operation.
Moreover, less than 10% of dealers achieve return
on investment within five years.
1.Hidden Danger 2.Break Out 3.Rescue Plan
In 2014, over 70% of dealers accused carmakers for
forcing inventories on them in order to pad the
number for the sales target. The action made 47%
of dealers to bear a stock-sales ratio of 2 , a number
much higher than the usual 1.5 alert level.
In August, 13 Honda dealers announced to protest
by not stocking from the manufacturers . In
November, FAW Toyota dealers intended to quit the
dealer network as inventory level exceeded the limit
by 10 times. In December, Beijing Hyundai dealers
in Shanghai collectively quitted the network. Last
but not least, BMW dealers requested a subsidy of 6
billion yuan to levitate the overstocking issue.
1.10
2.01
1.63 1.68 1.58 1.53 1.46 1.35 1.19 1.29 1.38
1.000.97
2.33
1.38 1.52 1.51 1.69 1.62 1.56 1.42 1.48
1.83 1.53
jan Feb mar apr may jun jul aug sep oct nov dec
2013 2014
2013-2014 Inventory Alert Level Trend For Chinese Auto Dealers

The More Segmented Market Segments
The growing popularity of SUVs and the rising consumption share of the young
generation have shed the spotlight on the subcompact SUVs. Its compatible
price, fuel efficiency and trendy design guaranteed the segment a promising high-
speed development.
Even in this new subcompact SUV segment, joint venture brands alone are
further "divided" to attract consumers of different needs. Peugeot 2008 and Buick
Encore, for instance, are more attracted to consumers who value brands, designs
and perceived qualities. For those who are sensitive to price, space and
configurations, they are prone to choose products such as Hyundai ix25 and
Citroen C3-XR.
Joint venture manufacturers have found just another new market opportunity
located in the gap between the traditional A+ and B0 segments. These new
products are direct threats to the A+ sedans and also confronting the shares of
entry level B0 models such as Chevrolet Malibu.
Kia K4 and Hyundai Mistra with larger space, Volkswagen Lamando with more
power and better configurations, Peugeot 408 with upgrades on everything you
could think of. Manufacturers are striving to fulfill consumer needs for
practicality, quality and innovation by launching the aforementioned products.
Design and Quality
2008+ Encore
Space and Practicality
ix25+C3-XR
Supreme A+ Models
408+ Lamando
Refined B- Models
Mistra +K4

New Models with STT in 2014
New Techs Onboard
Major manufacturers are investing more on
research and development of the Stop-Start
Technology (STT) as government regulations on
fuel economy grow more stringent. The gas-saving
hybrid technology turns off engine when the car is
not in motion and restart once the brake pedal is
released, improving fuel efficiency by an average of
3.5%. Acceptance and purchase intention,
however, remain low as the technology is still
immature.
In-car telematics is the blending of wireless
telecommunications technologies and infotainment
systems, ostensibly with the goal to provide drivers
an intelligent and assuring driving environments.
Automakers are eager to launch subsidiary brands
for telematics partly to keep up with the pace of
market development, and partly hoping to be
differentiated in this homogeneous market by offering
richer value-added services.
In respond to consumers' growing interests on
intelligence and safety, brands are introducing
more safety focus technologies to the Chinese
market. For instance, adaptive cruise control ,
night vision and auto-braking are introduced to
enhance competitive advantages. Volvo has a
vision that by 2020 nobody will be seriously
injured or killed in its new cars. Volvo’s City Safety
features pedestrian and cyclist detection with full
auto brake, day and night.
 Peugeot 408
 Mazda Axela
 Emgrand EC7
 Chevrolet Sail 3
 Volkswagen Golf 7

Cars Restriction Sparks Panic, Demand Boost
In an attempt to control smog and traffic, Shenzhen abruptly placed a cap on car purchases on December 29th
2014, putting citizens off guard. Residents flooded the Traffic Management Department to obtain certificates
proving they have bought their cars before 18:00. Customers who purchase cars after this time would have to
get their new car plates by lottery or auction.
The sudden policy has aroused public complaints and disappointments. In fact, ever since Beijing and
Shanghai started the license plate rationing, citizens of other major cities started to wonder when and where
would be the next one. The growing pessimism among the publics has spurred negative emotion and sparked
panic buying behaviors. Not only does rationing accelerate the market growth rate, it is also murdering the
health of the automotive industry.
Beijing capped the number of license plates in 2011 when car ownership hit a new high of 4.8 million that
year. However, started with Guangzhou, the standard for the policy has lowered by half. Any city with car
ownerships of more than 2 million are likely to face license plates rationing. Chengdu and Chongqing have
over 3 million cars on the street, Qingdao and Nanjing also have 2 million cars running around, these cities
are very likely to be the next to join the eco-squad. Some small cities that are not on the list may even
volunteer to impose license plate restriction to shove smog out the town.
Under the policy, consumers are prone to purchase cars with higher quality and perceived value. They are
more fond of premium brands and SUVs, hence a good opportunity for the German brands. License plate
restrictions may stimulate the growth of vehicle replacement substantially, but new purchases may be
significantly decreased. As the perceived value is much lower, Chinese brands may retreat from the frontline
to market in Tier 3 and Tier 4 cities.

1.7% 4.9%
20.0%
11.2%
40.3%
9.3%
1.6% 4.7% 6.3%
1年 2年 3年 4年 5年 6年 7年 8年 8年以上1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr > 8 yr
Trade InWave InMajor Cities
Source from: (1) Sinotrust report; (2/3) 2014 Autohome trade-in leads report
The Number Of Years Consumers Hold To Trade-In For New Cars (1)
71.5% of consumers trade-in 3 to 5 years
41%
21%
14%
7%
17%
22%
5%
21%
39%
13%
A0级车 A级车 B级车 SUV 其他
现有级别意向置换
38%
17% 15% 14% 16%
22%
19%
31%
13% 15%
自主品牌日系德系美系其他
现有级别意向置换
Trade-In Preferences By Segments (2) Trade-In Preferences By Brand Nationality (3)
Chinese automotive sales volume has been steadily
increasing since 2008. By assuming consumers
replace their cars in an average of 3 to 5 years,
China has entered the peek of vehicle replacement
in 2012.
With more Tier 1 cities imposing restrictions on
license plates, fewer plates are available, hence the
market focus has shifted to vehicle replacement. In
2012, 580K units of new cars were sold in Beijing,
while another 700K units were trade in the
secondhand car market. New car sales has benefited
from the prosperous secondhand market, over 60%
of new car sales came from vehicle replacement.
Dealers’ replacement service has also increased
significantly from 10% to 50%.
Attracted by its practicality, convenience and sport
potential, 39% of consumers would like to consider
SUV for their next car.
Consumers tend to look for an “upgrade” when
considering for trade-ins. German brands are, hence,
more preferable with their higher perceived quality,
better brand reputations and stronger luxurious touch.
A0 A B SUV Others
Currently
Owned Car
Preference
For Next Car
Currently
Owned Car
Preference
For Next Car
Chinese Japanese German American Others

RisingAwareness OnFuel Consumption
Brand
Swept
Volume
Maximum Power and Torque Models Equipped
General Motors 1.4T 110kw/235Nm Encore、New Cruze
PSA 1.2T 100kw/230Nm Peugeot 408, 308S
Volkswagen 1.2T 81kw/175Nm Golf 7
BMW 1.5T 100kw/220Nm Series 2、Mini
Ford 1.0T 92kw/170Nm Ecosport、Fiesta
GM Dynamic Skip Fire Volkswagen BlueMotion Volvo KERS
In late 2014, China announced to punish carmakers by restricting their
production and publicly naming them if they fail to meet fuel consumption
requirements on passenger vehicles set for 2015. Earlier last year, China
requested automakers to lower the average fuel consumption of passenger
vehicle to 6.9L/100km by 2015 and 5L/100km by 2020.
Major automakers eagerly introduced low-emission technologies such as
Stop-Start system (STT) and low-emission turbocharged engines (ex. 1.2L
Turbocharged Engine). Hoping to meet government criteria and to educate
the first pool of eco-friendly Chinese consumers, adjustments were also
made to increase the production proportion of smaller compact models.
Fuel saving technology is immature in general. Yet, with restless efforts in
research and development, carmakers successfully introduced fuel
conserving technologies such as Dynamic Skip Fire with cylinder deactivation
and KERS with energy storing flywheel. Advanced transmission technology
and hydromechanics chassis design are also introduced to enhance fuel
economy.

Premium Brands vs. Made InChina
New Locally Produced Models in 2015
Luxury-car manufacturers enjoy lower operation cost
by producing locally in China. Brands can avoid
paying import tariffs, source parts more cheaply and
efficiently, and benefits from lower labor and shipping
costs. Reducing import volume would brings cost
advantage and allows brands to boost sales by
offering more competitive prices.
“Made in China” allows brands to be more responsive
to market change. Environmental factors such as
exchange rate fluctuation and policy changes would
make little impacts on brands that produce locally.
Local production not only gives both dealers and
consumers greater confidence, it also allows
carmakers higher marketing budgets for brand
building. Infiniti, for instance, earned high brand
awareness and fondness in return of its heavy
investment in building brand image.
Despite the slowing growth of Chinese automotive market, demand for luxury cars is still rocket high. To meet the strong demand, premium brands all pick up the pace
and get ready to produce domestically in China. However, in this growing competitive market, is localization really the magic for a long term bloom?
Infiniti QX50
Chery Jaguar
Land Rover Aurora
Volvo XC60
Jaguar XE
Opportunities For Second Tier Luxury-Car Brands Challenges of “Made In China”
Given consumers’ lack of confidence in the words
“Made in China” and the production capacity of joint
venture partners, the quality of locally produced
premium-cars is at doubt.
Furthermore, it is difficult to grasp the degree for
price reduction. Consumers could hardly feel the
increase in cost effectiveness with little changes in
price. Yet, heavy reduction could lead to diminishing
premium brand image.
It is of great importance to find the balance among
sales target, network expansion and brand image. In
order combat the heavy sales pressure,
manufacturers need to learn to work on a common
ground and also cooperatively with their dealers.

Sales Promotion, The New Marketing Normality
A trend of continuously price cuts could be observed
in the overall automotive market in 2014. In order to
meet sales targets, carmakers had increased the
strength of sales promotion gradually over the 12-
months span, striking a record even higher than the
year of 2013.
With the market cooling down, it is becoming harder
for new products to hold their price tags firm. Product
cycle has significantly shortened as consumers are
growing less attentive and interested to new product
launchings. To sustain market shares, many
carmakers resort to price cuts as soon as three
months after product launch.
Facing direct competition from its twins brother
Toyota Levin, the 11th Generation Corolla facilitated
promotion policy “Five Degrees of Gratitude” in pre-
sales period. Corolla introduced more promotion
packages such as the “Six Degrees of Offering” after
product launch to attract eyeballs and to maintain
price competitiveness.
Source from Wilson Price Tracking Report 201412
9.5%
8.6%
8.8%
9.0%
9.2%
9.6%
9.9%
10.1%
10.4%
9.7% 9.6% 9.6%
9.7%
9.5%
9.3%
9.6% 9.7%
10.1%
10.5%
10.7%
11.0% 11.1%
11.7%
11.9%
jan Feb mar apr may jun jul aug sep oct nov dec
2013 2014
2013-2014 Strength of Sales Promotion In The Overall Market
K4 1.8L AT GLS Trax 1.4T AT DeluxeLevin 1.6L CVT G Elite Octavia 1.6L AT Elite
Yearend Cash Discounts For Selected Newly Launched Models（December 2014）

7-Seaters SUVs OnTheir Way ToReplace MPVs
With the introduction of second-child policy and the growing
demands for vehicle replacement and second time purchase,
7-seater SUVs are becoming more and more popular these
days. Reasonably priced, larger room, higher capacity, multi-
purpose and flexible space arrangement, these characteristics
have all made 7-seater SUV a great bargain for the
consumers. 7-seats SUVs are widely covered by mainstream
carmakers in the market, ranging from 150K yuan Chinese
SUVs to joint venture SUVs of more than 300K yuan.
Panaroma sunroofs, leather seats, LED headlights and other
innovated configurations, 7-seater SUVs’ selling points are
changing. As consumers value more on space and comfort,
communications are now focusing more on the practicality of
SUVs rather than the usual off-road capabilities . With 7-seater
SUVs joining to market luxurious touch and premium quality,
the boundary against MPVs is growing blur.
However, the future of this market segment is not as promising.
Some so-called 7-seater SUVs are really just “fake” ones
as their third rows are far from spacious. Hence, consumers
would be extra rational in weighing the practicality and
necessity of owning a 7-seater SUV.
<10%
Sales Share of Highlander 4WD in 2014
>40%
Sales Share of Charger 7-Seater 2WD in 2014
Core Selling Points
For 7-Seater SUVs
3 Rows 7 Seats
Higher Capacity
Panaroma Sunroof
Wider View
Comfortable and
Spacious Room
Premium quality

It’sHard ToMakeALiving, Dealers Set Eyes OnPost-Sales Market
In recent years, dealers could hardly profit from selling new cars, so they
turned their attentions to the post-sales market. The profitability in post-sales
market relies heavily on trusting customers and on dealers’ cost advantages
on branded accessories. Yet, the rising of Internet sector is rapidly eroding
the profit away.
With information readily available on the Internet, consumers are becoming
more sophisticated and experienced when making purchase decision. The
rampant of ecommerce sites such as Taobao and JD has aroused public
interests in DIY activities, hence deceasing the demand for dealer visits.
Furthermore, with the support of operating capitals, major Internet companies
eagerly integrated offline resources to offer a more affordable and convenient
door-to-door car maintenance service.
Hoping to establish long term after-market relationships, many dealers
packed post-sales service into sales packages to recruit customers as early
as possible.
Many luxury-car dealers defend competitions from the Internet by providing
more diversified services to customers. For instance, some dealers provide
differentiated services such as golf training, coffee tasting and movie
watching in luxurious cinema halls. These activities bring funs and a touch of
lifestyle to the traditionally tedious post-sales service.
2014 Venture Projects in Car Maintenance Industry
Date Company Round Amount
2014.11 BoPai /EasyCar Series A Over 10 Million Yuan
2014.10 Cheyian Series A 25.93 Million Yuan
2014.09 EasyCar Series A Over 10 Million Yuan
2014.08 Motor Geek Angel Investor Several Million Yuan
2014.10 ebaoyang Series A USD 5 Million
2014.08 xiiche Angel Investor Several Million Yuan
2014.09 Yangchediandian Series A USD 4 Million
2013.10.22 Chemayi Series A USD 2 Million
2014.03 YouXiaMotors Angel Investor N/A
2014.01 Shunhonda Angel Investor N/A

Online Car Buying,AGrowingTrend InChina
Source: 《2014 China netizens car-buying study》by iresearch and bitauto
According to a recent survey by Nielsen, 92% of consumers
would love to gather more information from the web prior to
purchase. Chinese consumers are very open to online car
market as 86% of the surveyed would consider buying cars
online.
A new mode of car buying is quickly shaping up in China.
According to bitauto.com, 10.5% of its users placed orders
online, while 70% of the 89.5% users who purchased at the
dealers is frequent users of automotive vertical websites.
Shopping for cars online is very tempting, not only does it save
consumers lots of time, it also provides consumers higher
discounts than the traditional dealers do.
However, rather than building an integrated online transaction
platform to meet the growing trend, the majority of carmakers
still merely use ecommerce channels to advertise and to collect
sales leads. Hence, there is currently no online platform existed
to replace traditional dealerships.
42.20%
55.60%
68.90%
73.30%
形式新颖
奖品有吸引力
优惠力度大
操作方便/节省时间
10.5%
Place orders
online, collect
cars at the
dealerships.
89.5%
Buy at the
dealerships.
Frequent users of
automotive vertical
websites
71.1%
Easy to Use/ Time Saver
More Discounts
Attractive Gifts For Buying
Innovative/ Interesting

Path-breakers WhoGrasped the Opportunity To MakeAChange
Audi A3: First Made In China Premium Compact Car
• A true masterpiece with breakthroughs in design,
technology and safety. By deepening strategic
cooperation with Volvo, Geely is on its way to
become a leading Chinese automotive brand.
• As an entry level premium compact car, A3 offers
premium quality with a more competitive price. It
is aiming at open-minded young consumers with
high purchasing potential.
Geely GC9: New Benchmark for Chinese Saloons SVW Lamando: A Coupe That Changed The Market
• The Chinese compact-car market is family
oriented. In order to offer young and sporty
consumers a choice outside the box, SVW
introduced Lamando, its sleek midsize coupe, to
the segment.

Self-Strengtheners, The Never Resting Segment Leaders
• Built with the newest MQB platform, Golf 7 is
launched with its proud heritage and trustworthy
brand reputation. Sales was doubled with the
expansion in production capacity for Golf 7.
SVW Golf 7: Best-Selling Chinese Made Hatchback Chevrolet Cruze: Take The Lead With Low Emission
• Lower emission, higher standard. With the brand
new powertrain, Cruze aims to wash off its fuel
inefficient image and to maintain its leading
position in the compact-car market.
Honda Odyssey: MPV leader For Business & Family
• With 7 seats layout, electric sliding door and
larger room, Odyssey continues to be the leader
in the MPV segment. In fact, even the best-selling
business MPV Buick GL8 is feeling the pressure
from its surging popularity.

The Daring New Comers ToThe Segment Benchmarks
Buick Envision: The Tiguan Terminator
• The “10% more” design philosophy equips
Envision with larger space, powerful engine and
more technologies. With its larger size and richer
configurations, Tiguan’s leading position in the
SUV market is severely threatened.
Peugeot 408: New Era Pioneer Of Midsize Sedans
• Built with the new EMP2 platform, Peugeot 408
comes with a wheelbase of 2730 mm, the widest
in the segment. Aiming at the bestselling A
segment model Sagitar, 408 is also equipped with
the most advanced technologies in the segment.
Infiniti Q50L: Challenger To the Premium-car Market
• Q50L aims to attract attentions from "ABB" lovers
with its sportier appearance, innovated steering
technology, and most importantly, its longer
wheelbase. Positioned as the most advanced
luxury sport sedan, Q50L is ready to change the
game.

Pan-90s: The New Market Force
The Rising Force in Chinese Automotive Market
Pan-90s is the young generation who were born in
between 1985 and 1997, a time of internet booming and
rapid economic development. With their more global
mindsets and comforts with consumerism, the Pan-90s
have a stronger sense of self and also more unique
aesthetics. As these individuals entering adulthoods, they
are on their way to become the next big spender and
market driver of the Chinese automotive market.
Judge Me, Judge My Car First
Growing up on the wheels, higher performance and safer safety could no longer excited the Pan-90s. Convinced by
the saying “what kind of people drive what kind of cars”, Pan-90s crave for cars with novelty and personality, i.e. cars
that differentiate them from the crowd. Front-view designs with imitation of human facial expression, for instance, are
very popular with the young generation. Dynamic designs on bodylines, wheel hubs and taillights have gradually
became the default criteria for purchase decision. Placing high importance on emotional satisfaction, Pan-90s yearn
for comforting interior design and richer interactive experience with their cars.
Open-minded but assertive, not only does this very trait of
Pan-90s nourished the development of subcultural
activities, it also shaped their preference for personal
space and “loose circles”. They love to organize groups
for their hobbies, but refused to be bounded by any single
one. They are not fond of collectivism, but are not
particularly into individualism either. Beside “vivid
character”, there is hardly other terms to summarize such
a diverse, open but self-contradicting group people.
«Vivid Character »Is Their Only Commonality
Brands, Are You Ready？
The Pan-90s is a opportunity that no brand can
forgo. Brands, however, are finding it difficult to
connect with the nebulous new demographic.
Aside from the usual recommendations like more
tailored messages and greater social media
presence, what else could brands do?

Entertainment Marketing,ANew “Must-Have” InCommunication
Infiniti sales in China surged 76% in 2013 and the
brand expects to maintain its growth momentum
this year in the world’s largest auto market. The
company launched a marketing campaign in 2013
to boost brand awareness, including sponsoring the
popular reality-TV show (Dad, Where Are We
Going) and “Dare to Love” brand campaign.
Volkswagen debut its brand-new midsize coupe,
the Lamando, in the 2014 Guangzhou Auto Show.
To raise product awareness, the brand launched
an intensive promotion campaign prior to the
official launch of Lamando. By sponsoring the
reality show Running Man (China), Volkswagen
aroused market interests by teasing the car in the
show. The show was on air in mid-October and is
now a buzz in the country.
Ford has became the exclusive title sponsor for
Chinese Idol, the largest and most watched reality
TV show. Ford Kuga featured heavily in the
nationwide initial auditions and the three-month
competition that began airing live on TV every
weekend. The sponsorship has gained Ford and
the new Kuga unprecedented exposure among
Chinese consumers, especially the younger
generation of car owners who appreciate the
practicality and capability of a SUV.
The collaboration of variety shows with automobile marketing is not new. In recent years, a growing preference on shows that are both fun and interactive could be
easily observed. Several carmakers are currently eagerly drafting entertainment sponsorships into their annual market plans. Entertainment marketing is becoming a
new “must-have” in boosting brand awareness and launching new products.

Technology IsNow The Eye Candy ToHook Consumers
Volvo introduced another high performance Drive
E engine in late 2014, featuring not one, not two,
but three turbos to provide fuel-efficient
horsepower. The company’s newfound devotion to
the four-cylinder engine is set to permeate its
complete lineup of cars. In fact, Volvo has been
stressing on its Drive E Powertrain Concept in its
communication for quite a long time, hoping to
attract more of eco-friendly consumers who value
performance.
Dongfeng Peugeot initiated three approaches-
Technologies, Products and Customer
experiences, in hopes of entering into the
market in a way that is the most relevant to
customers’ interests and integrating the “E
Power Strategy to improve its all-dimensional
support and hone a more competitive brand
edge
Honda is expanding application of the Earth
Dreams Technology, a series of new-
generation powertrain technologies that
realizes both driving performance and fuel
economy, to most models sequentially.
Honda also noted that it is preparing for
local development, production and parts
sourcing of hybrid models in China, which
will result in more affordable prices.

Regional Marketing = The New Core Strategy
China is often viewed as a land of limitless
opportunities. Decades of economic growth and
rising incomes, the ubiquity of digital technology, and
the transformation of the hearts and minds of
Chinese consumers all make China a market too
attractive to ignore.
However, careless misconception of China as a
homogeneous market often leads to difficulties in
assessing market demand and enacting effective
strategies. Consumers from various regions are
significantly different from one another in terms of
purchasing power, attitudes, lifestyles, media use,
and consumption patterns. Manufacturers set up a
variation of regional headquarters to further adapt to
local market conditions and to better devise
sustainable strategies.
Establish four independent regional
marketing departments to facilitate
local marketing activities, with budget
more than 1billion yuan.
Established a national headquarter to
device general marketing directions
for the ten regional sales with more
than 1.5 billion yuan budget.

Fading Halo Of The Traditional Purchasing Funnel
The rapid development of the Internet and the proliferation of digital
media have reduced the usage of traditional purchasing funnel
metaphor in many industries. Automotive industry, however, is still
widely adopting the traditional funnel as car-buying behavior remains
fairly routine and unique. With information asymmetry and
environmental factors such as license plate rationing, car-buying
process tends to have a relatively longer consideration period as
consumers are more easily affected. As the majority of consumers
make purchases in the dealers, carmakers are still using the traditional
funnel to locate market opportunities and resolve sales barriers.
Nevertheless, the traditional approach could no longer apply to the
rising new market force –the 80s/90s. These young consumers value
word of mouth very highly, they prefer to learn the products via people
and sources they trust, rather than from the brands themselves. Hence,
these consumers are often deem as fickle and random, cutting through
consumer decision journey anytime anywhere.
As a result, a brand-oriented purchasing funnel is developed to boost
sales conversion rate. The new model is consumer-oriented and aims
to enhance consumer experience through studying individual
purchasing behaviors
认知
Awareness
熟悉
Familiarity
深入考虑
Consideration
到店洽谈
Onsite Visit
购买
Purchase

New Consumer Journey Metaphor For Car Buying
Young consumers only take in messages from
brands they find interesting. Brands need to
provoke curiosity among the young consumers
in order to build relationship with them.
Young people value the comments from those
they recognize and trusted than from the product
reviews on vertical websites. They are constantly
seeking for recognitions from others.
Young consumers crave for products that are
unique in a particular aspect. They are also
looking for products that connect with them on
an emotional level.
Unique brand experiences are of great
importance to the young generation. These
consumers are looking for beyond-expectation
experiences with both the surrounding services
and the product itself.
Consumer Insight
Build relationship through establishing “cool”,
“trendy” and “fashionable” brand images with
multichannel communications.
Release complete product information, unveil
unique selling points to differentiate from the
competitors.
Become close friends with the consumers,
amplify emotional product benefits with a witty
and humorous manner.
Offer unique brand experience through
collaborating digital technology, test drives and
4S stores.
Marketing Action
Hey, it’s coming…
People say it’s awesome,
It’s really unique.
Yep, it’s mine!
Relationship
WOM
Appeal
Experience

Recruiting TheYoung Consumers
Bombarded by the proliferation of media and products, only messages coated with “differences” can catch the attentions of the information-fatigued young consumers.
This young population is not interested in exceptions. In fact, they are simply craving for products that bring them out of the crowd, products that show the hidden rebel
buried deep down their hearts. Talk sensitively to the young consumers, they are more than willing to turn themselves in as long as they resonate with the core spirits of
the brands. Young consumers do not like being lectured, they loathe any communication that is overly obvious and forcing. Product placement and content marketing,
for instance, are among the marketing tools that they find contemptuous. Young consumers are like cats –they are only interested in things that are authentic enough,
fun enough, and most importantly, with attitude.
The 15 months project recruited young consumers by employing
emotional appeals. Both the prints and the copies elaborated on
the sense of self and the pursuit for freedom, reaching
resonances with the young and adventurous target audience.
Jeep Patriot #Gap Year Project#
This attitude of strong sense of self permeate the brand
campaign. Featuring young mavericks with their true
selves, the campaign aims to encourage Chinese young
consumers to truly express who they are and to embrace
what makes them unique, no matter what others may say.
Buick Encore #Young，ThenSUV# Adidas #This Is Me#
Targeting the Post-80s, Buick deliberately made the launching
ceremony short and to the point, introducing the “SUV for young
people”. Calling for resonances from the young consumers, instead
of employing celebrity endorsement, Encore featured videos with 6
Post-80s standing out for their value, uniqueness and attitudes which
echoes Post-80s.

Brand Building, Goes Emotional
With its renown off-road performance, Jeep has always been proud of producing the “real SUV”. Jeep used to market extensively on the wild side of the brand by
emphasizing its expertise in off-road performances. A hardcore image of the brand was accidentally shaped, hence paving its way to the niche market.
Jeep defined SUVs as “a different way of life” and regards itself as the best representative of this freedom-loving ultimate lifestyle. In 2012, Jeep took the chance of it
70th anniversary to reinitiate brand building. The brand campaign sticks to storytelling by taking the road less traveled again. The company crafted an emotional,
oblique approach that barely shows any Jeep models at all. Cars are no longer the focus, people are.
Through formularizing communications, the brand successfully curated loyal followers by generating brand buzzes. Jeep elaborates on brand attitude through
storytelling via micro films. SUV performances, on the other hand, are demonstrated through holding national test drives and brand events regularly.
Jeep successfully delivered brand positioning and attitude through telling stories that echo with their target audiences. Using an emotional approach, the relationship
with potential consumers is further strengthened.

Got Money? Start Planning For Entertainment Marketing
Entertainment marketing is now the new favorites in automobile communication. Lamando with
“Running Man“, Kuga with “Voice of China“ and JX35 with "Dad, Where Are We Going" are
some big players in entertainment marketing. These brands did not succeed out of sheer luck –
without comprehensive marketing plans, nothing would be achieved.
With one in three Chinese reportedly watching the first season of “Dad, Where Are We Going”
and over 2.1 billion people searching the show online, Infiniti has undoubtedly increases its
brand awareness in China. QX60, the model featured in the show, has achieved a significant
increase in sales in 2013.The collaboration has proven fruitful, Infiniti launched new campaigns
in the following year to further emphasize on its emotional appeals to consumers in China.
Infiniti’s entertainment marketing strategy is more than just a TV show sponsorship. A star-
studded brand event was hosted, featuring the China debut of Katy Perry and performances of
popular Jimmy Lin and Harlem Yu. Sponsorships for popular program “Xiaoshuo” and “A Bite Of
China” were implemented. Microfilms were also produced to further advocate Infiniti’s core
brand value of “performance, passion, precision and provocation.
If poorly planned, entertainment marketing could easily dissolve into single events. Without
buzzes, it would be difficult to resonate with consumers and to enhance brand influences.
Communicate via myriad channels could enhance consumer engagement, but it is of great
importance to provide consistent information across the channels. Entertainment marketing is
most effective with integrated media and channels, brand spirits and product benefits could then
be planted into the sub-consciousness of the crowd.

More Campaigns OnTechnologies，For Fun
Press “R” for the other side of
story, switch between storylines at
any point of the video.
Honda came up with an interactive
dual-story video for the Civic and its
sportier version, the Civic Type R.
Titled “The Other Side”, viewers
could switch in between the cozy
family love story with ECON button
and the intense and sporty story with
the R button.
Audi demonstrates A4’s legendary
road hugging capabilities through
“Quattro® Experience” installation.
The installation features handcrafted
mini raceways and three Audi A4 slot
cars. The slot cars are equipped with
in-car cameras, which allow racers a
first person as they zip around the
track via iPad –enabled controllers.
Volkswagen’s Chrome extension
stop YouTube videos when you
turn away.
To illustrate its stop-start
technology, which turns the car off
when stopped, Volkswagen
launched a Chrome plugin that
pauses a video when the viewer
look away from the screen. The
extensions utilizes computer’s
camera to achieve the feat.
Mercedes-Benz uses chicken to
show off its new feature –“Magic
Body Control.
The new feature analyze the road via
a windshield-mounted camera and
adjusts the suspension accordingly.
Mercedes compares a chicken’s
ability to keep its head perfectly
positioned while moving its body to
illustrate the smoother and more
stable ride the feature offers.
http://v.youku.com/v_show/id
_XODE3NjAxNDI0.html
_XNTMxMjk4MjY4.html
_XNTY1NTYwMzM2.html
http://www.letv.com/ptv/vpla
y/21230892.html

Controls Tighten Up OnRegional Content Publishing
Regionalization allows marketing to be more flexible and targeted. With the help
from new media, brands could communicate with its core target audience via
multiple channels faster and more cost –effectively. In addition to the
communication from regional headquarters, carmakers also financially support
its dealers for independent marketing behaviors.
Dialects and local social events are largely adopted to generate buzzes and to
boost brand preferences. Understanding what the locals like and what they talk
about is essential to facilitate effective regional marketing strategy.
Down-to-earth contents could often make consumers laugh and could positively
increase brand awareness. However, be aware of the bottom lines,
inappropriate use of language and event marketing may result in negative brand
perception and biased brand image.
In this increasingly connected world, missteps and misinformation spread faster
than ever. Brands could suffer tremendous pressure from public opinions with
even the slightest bit of improper communication. Therefore, contents should be
strictly reviewed before publishing by the regional headquarters and the dealers.
Standard operation procedures for content publishing and crisis management
mechanism should be developed to minimize any potential damages to the
brands.

Promote Heritage With Xu Zheng
CONTEXT
Santana is one of the best-selling models of Shanghai Volkswagen in China. The model has
been a huge hit for 30 years and has accumulated positive word of mouth over the years. In
2013, Volkswagen decided to strengthen its most functional entry level family car image by
launching the All-New Volkswagen Santana. The brand wishes to attract more attention
from the growing young population who has limited budget in China.
CREATIVE IDEA
Chinese renown actor Xu Zheng has long been famous for his diligence in improving acting
and directing skills. Volkswagen invites Xu to be the product spokesperson and to promote
the heritage of producing high quality Santana.
EXECUTION & RESULT
Xu took part and directed four TVCs specifically for Santana. Each TVC elaborates on
different USPs of the car, namely “safety”, “efficiency”, “brand” and “craftsmanship”. All New
Santana achieved a marvelous sales of 285,293 in 2014, a 60.7% increase from 2013.
VIDEO LINK
Safety：http://v.youku.com/v_show/id_XNjI0MjEwMzU2.html
Brand：http://v.youku.com/v_show/id_XNjIzMDkwNTA4.html
Economic：http://v.youku.com/v_show/id_XNjIzNTE0NjU2.html
Craftmanship：http://v.youku.com/v_show/id_XNjMxOTg2OTg0.html

Beckham Launches New Jaguar
CONTEXT
China is becoming the British luxury and sports car brand’s most important and competitive
market. David Beckham, arguably the most recognizable British star across the Asian
continent, is chosen to be the Jaguar’s brand ambassador in China. Jaguar is investing heavily
in brand ambassadors as it seeks to compete with Mercedes, BMW, Audi and Porsche.
CREATIVE IDEA
Beckham appears in a series of print and TV ads screened exclusively in China, starting
with the campaign for launching Jaguar F-Type Coupe in the country. Beckham also
appears in the brand TVC –“Never Stop Achieving”.
EXECUTION
The 2014 Jaguar Alive Brand Festival is Beckham’s first appearance as the brand
ambassador in China. The event transported visitors through time to experience the past,
present and future of the British brand’s legendary cars. The brand transformed the Beijing
751 D Park venue into iconic British landmark, the Royal Albert Hall, fully brought Jaguar’s
British heritage to live. It was one of the hottest tickets among Beijing Auto Show’s pre-parties.
VIDEO LINK
http://www.iqiyi.com/w_19rsfh5l3p.html

Peugeot 2008 Plays Beyond 360°
CONTEXT
With only a few competitors, there is a large market space and market potential in the subcompact
SUV segment. As first movers, Buick Encore and Ford EcoSport have built product awareness and
status quite early in the segment. Dongfeng Peugeot 2008 should also take its first-mover
advantage to build an unique product image that young consumers would resonate with.
CREATIVE IDEA
The 360 degree campaign of 2008 revolved around the communication concept “Play in Soul. In
addition to traditional forms of communication, Peugeot’s global brand ambassador is appointed as
the spoke person for 2008, a variety show is sponsored, mobile game marketing is executed to raise
awareness and recognition of the newly launched product.
EXECUTION
2008 achieved an outstanding sales of over 7000 units in its very first month. With the adoption of
mass media, 2008 topped the Baidu Hot Search Chart for three months, an achievement that none
of its competitors has made. 2008 has also sponsored a popular variety show named “Perhaps
Love” on Hubei TV. The show is reportedly viewed by 300 million viewers online and contacted over
640 million people in total.

DS，Let Nymph Stay WithYou Forever？
CONTEXT
In 2013, Changan PSA appointed Sophie Marceau as the spokeswoman for DS 5 –the first
domestically produced model in the DS line. The elegant French actress perfectly matches the
brand’s spirit with both her attractive character and personal image. Her immense popularity
helps boosting the awareness of the DS brand in China.
CREATIVE IDEA
China and France celebrates their 50th anniversary of diplomatic relation in 2014. To celebrate,
Sophie Marceau was invited to perform “La Vie En Rose” on Chinese state broadcaster CCTV’s
2014 New Year gala. The show is hugely popular with more than 750 million viewers in China
alone. As the actress got even more popular with the gala, DS appointed her to be the
spokesperson for DS 6 to amplify the effect of celebrity endorsement to the fullest.
EXECUTION
As the spokesperson, Sophie Marceau is featured three videos –teasers, TVC at launch and
blooper. Marceau starred as the heroine of the short movie “Ace Trilogy”, illustrated the perfect
blend of French elegance with the wildness of an SUV, allowing the DS brand to stand firm
among the second tier premium brands.

Geely Bright Prospect Coast Tour
CONTEXT
The struggles and survivals of small and micro businesses have received more and more
attention. Geely GX7’s customers are mainly those emerging entrepreneurs who hold fast
to dreams and struggle for them.
CREATIVE IDEA
Passing by 10 provinces and dozens of coastal cities, Geely seeks for local customs,
maritime civilization and commercial culture; look for start-up small and micro businesses;
listen to their growth story; and promote Chinese tradition and spirit in enterprising.
EXECUTION
The campaign “Geely GX7’s Coast Tour & Survey on the Survival and Development Condition
of China’s Small and Micro Businesses started from Dongxing City of Guangxi Zhuang
Autonomous Region, the southernmost point of China’s coastline, and go north in a relay. The
coast tour provides opportunities for consumers to discuss the success and failure of their
businesses with Geely and experience local commercial culture together.

Toyota Corolla Hotel
CONTEXT
Toyota launched two closely identical models, 11th Generation Corolla and Levin, in mid 2014.
The 11th Generation Corolla by FAW Toyota is redesigned base on the European version of
Corolla, while GAC Toyota's Levin is seemingly more sporty American Corolla. However, the
two models are essentially the same, which poised difficulties for consumers to make decision.
Clear positioning was urgently needed.
CREATIVE IDEA
Renovate hotel rooms with Corolla touch (modern, premium and comfort), to show Corolla’s
capability to make drivers and passenger to feel just like home.
EXECUTION
FAW Toyota cobranded with Crown Plaza and Holiday Inn in 30 major cities, 2000 nights of stay is
provided nationwide. Individuals who purchase Corolla by the end of August 2014 would be invited
to participate a lucky draw for a stay in Corolla Hotel. Demands hit new high with a monthly sales
of 29,000 units in December and an average monthly sales of over 20,000 units since September.

Critical Thinking
1. Subcompact SUVs in 2014, and now what? What segment will the blue ocean lie next?
2. With new technologies coming out, how to facilitate consumer education to encourage purchase?
3. How to sustain brand image when price cut (sales promotion) is becoming the new market normality?
4. When “Made In China”, how to guarantee product differentiation and sustain premium brand image?
5. How could dealers do to strengthen their relationships with consumers?
6. What is the future of online car buying? What could we do to really develop a brand new channel for car purchasing?

Havas Worldwide
Formerly known as Euro RSCG Worldwide, Havas Worldwide is a leading integrated marketing communications agency.
Operating in 316 offices located in 75 countries, we are the largest network by global accounts and also the first agency to be
named Global Agency of the Year by Advertising Age.
Founded in 1993, Havas Worldwide is one of the earliest advertising agencies to enter the Chinese market. Over the 22 years of
operation, we have grown to be the most experienced integrated marketing agency in China. With innovated creative thinking and
thorough understandings in the market, we strive to provide advertising, marketing, strategic, corporate communications, digital
and social media solutions to our clients.
As the first foreign capital advertising agency in China, Havas Worldwide has committed to serve clients with future-oriented
integrated communications solutions since 2004. Over the past decade, we have proudly served key automotive clients including
Dongfeng Peugeot, Dongfeng Citroen, Changan PSA, Beijing Auto, Jaguar and Volvo. Havas Worldwide have also worked with Air
France, Dell, Pfizer, Master Kong, Yili and many other major market players over these years of operation in China.

2015 China Auto Marketing and Communication Review

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