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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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FOCUS: Israel-Palestine War

Why The U.S. Lost Its Leverage In The Middle East — And May Never Get It Back

In the Israel-Hamas war, Qatar now plays the key role in negotiations, while the United States appears increasingly disengaged. Shifts in the region and beyond require that Washington move quickly or risk ceding influence to China and others for the long term.

Photograph of U.S Secretary of State Antony Blinken  shaking hands with sraeli Defense Minister Yoav Gallant.

November 30, 2023, Tel Aviv, Israel: U.S Secretary of State Antony Blinken shakes hands with Israeli Defense Minister Yoav Gallant.

Chuck Kennedy/U.S State/ZUMA
Sébastien Boussois


PARIS — Upon assuming office in 2008, then-President Barack Obama declared that United States would gradually begin withdrawing from various conflict zones across the globe, initiating a complex process that has had a major impact on the international landscape ever since.

This started with the American departure from Iraq in 2010, and was followed by Donald Trump's presidency, during which the "Make America Great Again" policy redirected attention to America's domestic interests.

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The withdrawal trend resumed under Joe Biden, who ordered the exit of U.S. forces from Afghanistan in 2021. To maintain a foothold in all intricate regions to the east, America requires secure and stable partnerships. The recent struggle in addressing the Israeli-Palestinian conflict demonstrates that Washington increasingly relies on the allied Gulf states for any enduring influence.

Since the collapse of the Camp David Accords in 1999 during Bill Clinton's tenure, Washington has consistently supported Israel without pursuing renewed peace talks that could have led to the establishment of a Palestinian state.

While President Joe Biden's recent challenges in pushing for a Gaza ceasefire met with resistance from an unyielding Benjamin Netanyahu, they also stem from the United States' overall disengagement from the issue over the past two decades. Biden now is seeking to re-engage in the Israel-Palestine matter, yet it is Qatar that is the primary broker for significant negotiations such as the release of hostages in exchange for a ceasefire —a situation the United States lacks the leverage to enforce.

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