Economy

China's Booming Auto Market Has A Loyalty Problem

The automobile market in China is at full throttle, but customers are extremely fickle. What are automakers – foreign and domestic – supposed to do to build brand loyalty?

a FAW-Hongqi L5 car at the China Self-innovated Auto Expo in Beijing in 2013
a FAW-Hongqi L5 car at the China Self-innovated Auto Expo in Beijing in 2013
Geng Huili

BEIJING – There is a new report about brand loyalty among China’s current 90 million car owners. The survey and analysis by the Boston Consulting Group shows that nearly three-quarters of Chinese car owners plan to switch brands for the next car they get. This "great brand migration," as the report calls it, is the highest level among the world’s major automotive markets.

The report also shows that Chinese car owners’ loyalty to domestic Chinese brands is particularly low, a mere 17%. Foreign car makers don’t seem to have done so much better in this respect – as 29% of owners of foreign mid-range market cars said they’ll stick with the brand they currently own, while 57% of the European luxury range owners say they'll try out another foreign brand.

It's not hard to understand why China's car market is a particularly fierce battlefield. China is the world's fastest growing major car market, and has attracted 90% of global automakers thus making China the car market with the most brands.

Furthermore, owning a car is a relatively new thing for Chinese people, and many are only first-time buyers in comparison with their peers in the West or in Japan, who have always been surrounded by cars.

High-speed change

In short the shakeout of the Chinese market of automakers, small or big, foreign or domestic, will continue for quite some time. Even when China's initial phase of market competition comes to an end, the market will nevertheless still feature many car brands and will be very different from the mature market of the West or Japan where major brands have been reduced to just a handful.

But what also sets apart China's market development and competition environment is the high pace of change. Any tiny laxness or random error could lead to a landslide failure for a brand.

(Photo - Huchris)

For instance, the research shows that 40% of Chinese owners of economy domestic models planning to trade up to a foreign volume brand have their sights set on buying a Volkswagen model. But just ten years back, Volkswagen suffered from a very negative reputation with Chinese consumers, and typically lost out to such competitors as Honda, Toyota and Ford.

Likewise, whereas the top three German prestige car makers, Mercedes-Benz, BMW and Audi, used to have an "inhuman" image among Chinese customers, 90% of foreign volume-brand owners who are trading up said they are likely to buy one of the three brands. Each of the three in fact currently already sell several hundred thousand cars annually in China.

But we now know that car brands currently enjoying high loyalty and popularity in China have not time to sit back and relax. For Volkswagen, the Japanese and South Korean competitors are snapping at their heels ever more closely these days. So it is as well for Audi, BMW, and Mercedes, which rely in particular on a rapid introduction of products and localization. Other luxury car brands such as Volvo, Infiniti, and Jaguar Land Rover are now doing the same, intensifying their aggressive pace in attacking the Chinese market.

As a result China" domestic Chinese carmakers don't really need to feel overly pessimistic since loyalty is a problem across the board. Fickleness also carries new opportunities, so long as you are always improving to keep your vehicles ahead of the others. After all, China releases several hundred new cars or brand promotions each year. The ones that convince the customers are not necessarily the carmakers who spend the most money or stage the biggest event, but the ones with the ability to win over new customers with a special touch – and keep them with reliability.

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Society

What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel

-Essay-

BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.


Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

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