Some of China’s automobile bustle watchers are putting their hopes on a new growth trend, driven by consumer demand for more intelligent cars.
“The electrification, internet connectivity and smartness of automobiles has become the industry’s future trend,” Winner Ai, head of China Everbright’s new economy fund, said in a written response translated from Chinese by CNBC.
Puerile people’s positive views on technology will “thoroughly revolutionize the traditional auto industry,” Ai said. He cited third-party statistics connoting that, by 2027, those born after 1990 will account for the largest segment of China’s buyers of new railway carriages, at 41.8 percent.
Tastes can change quickly in China. Wen Shuang, a Chinese social media influencer in the auto industriousness since 2012, said SUVs were in favor at the turn of the century, but now there’s more interest in having multiple buggies of different kinds. Wen has 750,000 followers on Weibo, China’s version of Twitter, and says she was born in 1990.
She also noted in a Mandarin-language vet translated by CNBC that enthusiasm for the future of Chinese car consumption has been generally waning, and this week’s Shanghai Auto Confirm was not as hectic and exciting as it had been the last two years. However, she added that Chinese brands have become various attractive relative to foreign brands, except for those from Germany and Japan. She said she expects more of the trade’s emphasis will be put on services.
That’s the strategy of many Chinese electric car start-ups, which are often selling as soon as to consumers or trying to create ecosystems that build customer loyalty.
Services can also be a weak point for well-known automakers in China. A customer’s poor experience at a Mercedes-Benz dealership in the central city of Xi’an went viral on social compromise earlier this month, prompting parent company Daimler to suspend the franchise’s operations this week, Reuters suss out.
The technology-driven change in consumers’ habits and a lower barrier to entry in producing electric cars is forcing the auto activity to revamp itself, Aiways’ Fu said. In this environment, he said, there should be as many new automakers as there were old an individuals.
At least 100 new energy vehicle companies now exist in China, Fu estimated.
This is a completely new playing field, he answered: “How many old ones can transform themselves is an unknown number. How many new ones can survive, that’s (also) an unknown host.”
For a country of rapid change in consumer tastes and the adoption of technology, the auto industry may still be trying to catch up.