1、Insights on Car PurchaseDesicion Brand(2025)TengYi Research InstituteThe Diminishing Power of Foreign BrandsAuthorsDirector/Chief ALijun ZhouIndustry AYing GaoIndustry ABenya ShiChinese consumers have long prioritized branding when it comes to buying cars:if a product is not under a certain brand,th

2、ey probably will not consider buying it.Foreign brands with their powerful branding took advantage of this consumption psyche from Chinese consumers during the early years of market growth,something that Chinese brands have tried to overcome for a long time.Senior execs at carmakers often talk about

3、 the importance of branding and hoped to increase sales through branding improvement.This is even more so at Chinese brands.There is no doubt that both users and carmakers care a lot about the value of branding;To better look into branding and based on a user perspective and current mainstream defin

4、ition of branding,we define desire for brand as buyer preference on various perceptive factors such as product&service popularity,recognition,reputation,loyalty and recommendation;This report is mainly based on online research from TYRI with nearly 70,000 data samples in 2024 and references TengYi B

5、ig Data and TYRI offline research data.Desire for brand:buyer preference on various perceptive factors such as product&service popularity,recognition,reputation,loyalty and recommendationDesire for Brand SchematicLoyaltyOthersPopularityRecognitionReputationDesireforBrandProductServiceRecommendationC

6、hinese car buyers have always cared about branding over the past 20-30 years.Desire for brand in 2024 was still very high at 68.35%;Foreign brands like Audi,VW,Toyota,Honda and Buick have long enjoyed stronger power over Chinese brands like Geely,Haval,BYD and Chery,making their chairmen and CEOs li

7、ke Eric Li,Yin Tongyue,Wang Chuanfu and Wei Jianjun envious,jealous and even hateful.They all wished that one day Chinese brands can command the same if not stronger power as these foreign brands do,and leave them in the dust;Perseverance has paid off.Over the past 3-4 years or so,Chinese brands beg

8、an to surpass foreign brands in certain branding metrics:in 2019 Chinese brands had user loyalty of less than 10%,far behind that of foreign brands.Foreign volume and high-end brands had user loyalty of 15%and 23%,respectively at the time.Then Chinese brand loyalty began to steadily rise and finally

9、 surpassed that of foreign brands in 2023,and maintained at a level of around 25%in 2024,while the opposite happened to the foreign brands;in 2020 Chinese brands had user NPS of less than 10%,also significantly below that of foreign brands,but steadily improved thereafter,finally surpassing that of

10、foreign volume brands in 2022 and that of foreign high-end brands in 2024.In other metrics such as recognition and reputa-tion,Chinese brands have also improved quite dramatically,closing the gap with or even surpassing foreign brands;In early 2025,there are still many Chinese consumers that would o

11、nly consider brands like VW,Toyota,Audi,Mercedes and BMW.But not the same can be applied to brands like Hyundai,Kia,Chevrolet and Mazda.What will happen in 5 years?The desire for brand in Chinas car market in 2024 was 68.35%,but key metrics such as loyalty and net promoter score(NPS)for foreign bran

12、ds have deteriorated dramatically over recent years,severely hurting their brand powerSource:TYRISafetyQualityReputationOthersBrand68.35%PriceComfortPre-Purchase Desire for Brand in ChinasPV Market in 2024Brand Loyalty of ThreeMajor Brand Categories2019-2024Brand NPS of ThreeMajor Brand Categories20

13、20-2024Foreign High-End Brands Foreign Volume Brands Chinese BrandsForeign High-End Brands Foreign Volume Brands Chinese Brands0%5%10%15%20%25%30%201920202021202220232024-10%0%10%20%30%40%20202021202220232024Over the past 4-5 years or so,most foreign brands like VW,Nissan,Audi and BMW experienced de

14、terioration of both volumeand pricing as their brand power weakenedBranding improvement makes carmakers happy,while its deterioration makes them frown.Over the past 4-5 years or so,as foreign brands power dramatically diminished in China,a series of negative phenomena rapidly ensued:discounting at t

15、he point of sale steadily rose,especially in 2023-2024.Toward the end of 2024,average per-vehicle discount at foreign volume and high-end brands neared RMB60,000 and exceeded RMB100,000,respectively.This type of drastic discounting rendered MSRP useless,and dealers are often the first to bear the fu

16、ll brunt;many Chinese brands like BYD and Geely could always rapidly increase sales through price cuts,but massive price promotions at foreign carmakers instead resulted in further sales declines.From 2017 to 2024,end-user sales of foreign carmakers in China fell from 15 million units to below 10 mi

17、llion units,as their market share dropped from 60-70%to slightly over 40%;The deterioration of both volume and pricing reflects one cruel reality:foreign carmakers are confronting challenges in China that are much worse than thought.Even highly profitable high-end brands like Audi,Mercedes and BMW e

18、xperienced drastic deterioration of revenue and profitability in 2024 because of challenges in their core Chinese market,further fueling conflicts with their dealers.Zhongsheng Group,a prominent dealer group,accelerated their operational focus to Chinese high-end brands like AITO,LUXEED and Xiaomi i

19、n 2024,ditching foreign high-end brands like Mercedes,Audi,BMW and Lexus.Toward yearend,Huayang Aotong,once the largest Audi dealership in Beijing,switched to selling AITOs;The deterioration of volume of foreign carmakers in China in recent years might have been even more severe had they not had the

20、 branding advantage that they used to have.If this cant be improved in time,their brand power will be completely gone soon or later.Source:TYRIMercedes&BMW:net profit;Audi:operating profitAverage Discount Levels atForeign Brands 2023-2024(RMB 10,000)0246810122023Q12023Q22023Q32023Q42024Q12024Q22024Q

21、32024Q4Foreign High-End BrandsForeign Volume BrandsEnd-User Sales andMarket Share of ForeignCarmakers in China2017-2024(10,000 units)Global Revenues,Profitand Growth at BBAQ1-Q3 2024(100 million Euros)Market ShareEnd-User SalesRevenue YoY ChangeRevenueProfit YoY ChangeProfit0%20%40%60%80%05001000150

22、0200020172018201920202021202220232024-60%-50%-40%-30%-20%-10%0%020040060080010001200AudiMercedesBMWA huge deterioration of brand power and rapid worsening ofmetrics like sales and profitability have forced foreign carmakersto accelerate the search for and implementation of effectivecounter measuresA

23、s more of their brand metrics such as loyalty and NPS get beaten by competitors,official pricing mechanism cracked,corporate profitability fell off a cliff and market share dropped below 50%,foreign carmakers have been pushed to the brink in China.This year is a dangerous yet crucial year for foreig

24、n carmakers in China.They must come up with effective counter measures asap;Foreign carmakers have actively responded to the competitive landscape over recent years by strengthening domestic supply chain,deepening cooperation with Chinese partners and appointing new CEOs,among other measures.But the

25、se were stopgap measures that did not effectively contain falling volumes and prices and did not address the root cause of problems;There are countless books,papers and articles in China on corporate brand building.After analyzing various perspectives,we have discovered that lots of measures address

26、 products and services,and in turn,lots of measures address the end users.Because user analysis is a core strength at TYRI,we will hinge corporate brand building on the users behind the products and services.Based on this logic,we can come up with a very simple yet clear analytical logic:the key to

27、foreign carmakers reestablishing their brands is indeed a focus on their users.Branding SchematicBrandUserProductService Chinas car market is increasingly dominated by middle-agedbuyers who desire energy-saving and large vehicles,yet manyforeign carmakers are still stuck with a“go young”mindset,lack

28、ing suitable products for middle-aged buyers,resulting indeterioration of brandingFrom 2018 to 2024,Chinas car market increasingly became dominated by middle-aged buyers as their share of overall sales reached nearly 54%and average age of vehicle buyers topped 40.More and more car buyers came from f

29、amilies with both elderly people and children,resulting in new consumption trends such as desire for energy-saving and large vehicles.Many Chinese brand products like Li Auto L series,Tiggo 8 series,BYD Tang and Denza D9 benefited tremendously;In early 2025,these joint ventures that often talk about

30、 the importance of“go young”all are mired in a funk of falling sales and prices.If their products and services cannot keep up with middle-age buyer trends,their brand power will go nowhere but down.Most foreign carmakers seemed to have ignored this trend,or they chose to play the fool.Even though th

31、ey have been thrown into passivity,they still bet on the“go-young”strategy:In 2020,the president of SAIC VW then said that products like the Tiguan X and ID.series will all focus on offering“go-young”features,and in 2021 the new Lamando will be more aggressive in terms of“go young”features and even

32、the new Passat and Lavida will look“younger.”But starting from 2020,the user base of volume drivers such as the Lavida,Bora and Sagitar increasingly became more middle-aged and even older,official measures really did not address issues effectively;in 2023,a vice president of Beijing-Hyundai said tha

33、t definition,R&D,sales&marketing and service of models going forward will take into account the opinions of young people,injecting more youth-related factors into its brand identity and setting a solid foundation for its long-term development,embracing the future with infinite vitality.“Go young”ind

34、eed helped define Beijing-Hyundai,but will it also lead to its demise?In 2024,a vice president of SAIC GM believed that mainstream buyers are in their 30s and therefore SAIC GM must accelerate brand transfor-mation and embrace“go-young,”Right now the saviors of SAIC GM are the Buick GL8 and Envision

35、,are the primary buyers of these two products only in their 30s?In 2024,the president of SAIC Audi Sales said helping Audi solidify its labels of youthfulness and technology has been something that SAIC Audi has continued to do as it progresses forward.Audi has succumbed to emerging high-end brands

36、like Li Auto and AITO,that cant be because of lack of“go young”tactics,can it?Share ofChinas PVMarket byAge Group2014-2024Share of VehicleSize Purchased vs.Pre-Purchase forMiddle-AgedBuyers 20230%10%20%30%40%50%60%70%80%20142018201620202024YouthMiddle-AgedElderly0%20%40%60%80%100%PurchasedPre-Purcha

37、seLargeMid to Large MidszieCompactSmallMicroShare of Vehicle Energy TypePurchased vs.Pre-Purchase for Middle-Aged Buyers 2023BEVEREVPHEVHEVICEV0%20%40%60%80%100%PurchasedPre-PurchaseViews on“Go Young”From Senior Execs of Select JVs 2020-2024SAIC VW President in 2020:following the Tiguan X,the ID.ser

38、ies will become“younger”and the same will be even more evident for the Lamando in 2021,as will the New Passat and New LavidaBeijing Hyundai VP in 2023:the“Renewal 2025 Plan”clearly defined three major targets involving product transformation,brand renewal and service innovation,where we will listen

39、to opinions of young people in the areas of vehicle definition,R&D,sales&marketing and service,integrate“go young”into our development genes,thereby attracting more young consumers,lay a solid foundation for the long-term brand development,and march toward the future with boundless vitalitySAIC Audi

40、 Sales President in 2023:helping Audi solidify its labels of youth-fulness and technology has been something that SAIC Audi has continued to do as it progresses forwardSAIC GM VP in 2024:SAIC GM needs to accelerate brand transformation and embrace“go young.”Mainstream car consumers are in their 30s,

41、who live in an internet era where things change constantlySource:TYRIChinas car market is increasingly dominated by female buyers whodesire BEVs and small vehicles,but foreign carmakers are still bettingon male buyers,lacking suitable products for female buyers,resultingin deterioration of brandingF

42、rom 2018 to 2024,Chinas car market also accelerated toward a market driven by female buyers in addition to middle-aged buyers,as share of sales from female buyers increased from a little over 20%to nearly 40%.These female buyers had completely different desires than their male counterparts:men love

43、bigger vehicles while women love smaller vehicles,as female buyers accounted for around 70%of sales of micro and small vehicles;in 2023;men loved ICE vehicles and energy-saving vehicles while women loved BEVs,as nearly two-thirds of BEV sales in 2023 went to female buyers;Over the past few years or

44、so,Chinese brands that proactively expanded their footprint in small BEVs became the biggest beneficiaries of this trend:models like the Bingo,Dolphin,Seagull and Good Cat became hot commodities and left small ICE vehicle models from foreign carmakers like the Polo,Fit and Vios in the dust;in 2023,f

45、emale buyers contributed to nearly 45%of BYDs sales,helping to catapult BYD into a leader in both China and the world.In contrast,female buyer penetration at foreign carmakers fell steadily:in 2023 it fell below 30%for Nissan and 25%for both Honda and Toyota;Though foreign carmakers in recent years

46、have tried in earnest to break this mold,nearly none came out with a stronger female strategy.In early 2025,most foreign carmakers still over relied on tactics that are focused on male buyers such as trying to offer NEV models based on their original ICE vehicle counterparts.But unfortunately,many o

47、f these foreign carmakers that are over reliant on male buyers are experiencing falling sales and prices.If their products and services cannot keep up with female buyer trends,their brand power will only further diminish.Share of Chinas PV Marketby Gender 2014-2024Female Buyer Penetrationby Mainstre

48、am Segment 2023Female BuyerPenetration by MainstreamEnergy Type 2023Female Buyer Penetrationat BYD and Core CompetingBrands 2021-20230%20%40%60%80%100%201420162018202020222024FemaleMaleBYDNissanHondaToyota0%10%20%30%40%50%60%70%80%0%10%20%30%40%50%60%70%80%ICEVHEVPHEVEREVBEV0%10%20%30%40%50%20212022

49、2023Source:TYRIMicroSmallCompactMidsizeMid to LargeLargeChinas car market is increasingly dominated by middle-class buyers who desire high-end and multiple vehicles,but foreign carmakers stillpredominantly cater to blue collar buyers,lacking suitable productsfor middle-class buyers,resulting in dete

50、rioration of brandingBecause household income of middle-aged and female buyers is relatively high,more middle-class buyers and more female buyers have resulted in Chinas car market becoming more dominated by middle-class buyers,the share of which grew steadily from 2020 to 2024,eventually topping 45

51、%.That share will likely top 50%in 2025-2026 as middle-class buyers will dominate Chinas car market;Compared to blue collar buyers,middle-class buyers have their own distinctive buying characteristics:their household car ownership is increasing from just one to two or more as they need to address th

52、e needs of not only the husband but also the wife,children and parents;they have stronger desire to purchase high-end brands,which accounted for over 30%of cars purchased by middle-class buyers and nearly 45%of middle-class buyers looking to purchase in 2023;The value of the middle-class car market

53、is very high.As more middle-class buyers flocked to the market in recent years,it resulted in the rapid rise of Chinese high-end brands like Li Auto,Xiaomi,AITO and Denza and improvement in core metrics such as profitability.But foreign brands still over proportionately catered to blue collar buyers

54、.In 2023,foreign brands like Kia,Hyundai,Chevrolet,Nissan,VW and Buick still had very high share of blue collar buyers,higher than industry average,even reaching as high as 60%for some.As transaction pricing of entry-level high-end models like the Audi A3,Audi Q3 and BMW 1 Series falls below RMB200,

55、000,the share of blue collar buyers for Audi,Mercedes and BMW has also risen,to around 20%in 2023.Its not easy to improve both user quality and profitability;Because most young people fall into the blue collar class,foreign carmakers overreliance on the“go young”strategy will result in the further d

56、eterioration of their user quality.In early 2025,most foreign carmakers in China still offered products and services that do not cater to the middle-class buyers,its inevitable that their brand power will further diminish.Share of Chinas PVMarket by Social Status2014-2024Household Car OwnershipMiddl

57、e-Class Buyers vs.Industry Average 2023Share of Brand Type in Middle-Class Car Market Purchased vs.Pre-Purchase 2023Blue Collar BuyerPenetration at MainstreamForeign Brands 20230%10%20%30%40%50%60%70%80%201420162018202020222024Middle ClassWealthyBlue Collar0%20%40%60%80%123 or MoreIndustryMiddle-Cla

58、ss0%10%20%30%40%50%60%High-EndVolumeEntryPurchasedPre-Purchase0%20%40%60%80%Source:TYRIKiaHyundaiChevroletNissanVWBuickHondaFordToyotaIndustryMazdaBMWAudiMercedesChinas car market is increasingly becoming a more retention-driven market,resulting in desire for more convenient and economical service n

59、eeds,but foreign carmakers still predominantly sell and service vehicles via 4S stores that have high costs and are often located in the suburbs,resulting in deterioration of brandingAs their consumption habits mature,more and more Chinese car buyers began to pay more attention to the convenience an

60、d economy of maintenance and service,resulting in a significant decline in owners retaining service at 4S stores.From 2023 to 2024,the retention of both old and new users at 4S stores fell:the retention of older customers that have owned their vehicles for five years or more at 4S stores fell below

61、35%;In terms of service system optimization,both Chinese and foreign carmakers have lagged behind in terms of reform efforts,although the former was ahead of the latter by a wide margin.As of early 2025,foreign carmakers still predominantly sell and service vehicles through 4S stores that have high

62、costs and are often located in the suburbs.Because their channel and network optimization lag far behind the growth and evolution of their user base,foreign brands will inevitably experience further diminishing power of their brands.In recent years,Chinese car buyers have become more mature in terms

63、 of their consumption philosophy because more and more buyers are trading in their older vehicles for new ones or buying additional vehicles instead of buying for the first time.From 2018 to 2024,the share of trade-in purchase and additional purchase rapidly rose,with the former topping 47%and the l

64、atter exceeding 27%.First-time buyers have become“niche”buyers as their share of sales dropped to 25.46%;ConvenientAppointmentGoodReceptionConvenientLocationReasonableLaborOpen&TransparentServiceOffer Food/DrinksReasonablePartsCleanEnvironmentProfessionalMechanicsClean VehiclesShare of First-Time Pu

65、rchase,Trade-In and Additional Purchase in Chinas PV Market 2014-2024Top 10 Factors Contributing toAftersales Service Satisfactionat Neighborhood FranchiseStores 2024Top 10 Factors Contributingto Aftersales ServiceSatisfaction at 4S Stores 2024Retention Rate of Oldand New Users at 4SStores 2023-2024

66、Trade-InAdditional PurchaseFirst-Time0%10%20%30%40%50%60%70%80%2014201620182020202220240%20%40%60%80%100%3 Years5 Years or More202320240%20%40%60%0%20%40%60%80%Source:TYRIConvenientLocationReasonableLaborReasonablePartsEasy to MakeAppointmentGoodReceptionServiceTransparencyShortWait TimeInformMateri

67、als UsedCleanEnvironmentProfessionalMechanicsThe root cause of foreign carmakers experiencing falling sales andpricing as well as diminishing brand power is because their productsand services lag far behind new user trends from middle-aged buyers,female buyers,middle-class buyers and a retention-dri

68、ven marketThrough reasoning detailed in the four previous slides,we extracted several new trends of the evolution of Chinese car buyers in terms of middle-aged buyers,female buyers,middle-class buyers and buyers looking to trade-in or purchase additional vehicles.These trends are driving the popular

69、ity of energy-saving large vehicles,mobility enabling small vehicles,high-end brands and convenient&economical service points.But the current sales&service philosophy at foreign carmakers severely lags behind this evolution and is still over reliant on addressing young and first-time buyers.Foreign

70、carmakers also face challenges of over proportionate share of male and blue collar buyers,resulting in products and services limited to catering to ICE vehicles,family economy cars and comprehensive network points;In essence,foreign carmakers still live in the past.They can only resort to their bran

71、d power to make up for their products and services unable to match the evolution of users.Evolution of Chinese Car Buyers/Product&ServiceMiddle-AgeEnergy-SavingLarge VehicleGo YoungEntry ICEVMaleFamily Economy VehicleFemaleMobility Enabling Small VehicleMiddle-ClassHigh-End and Multi-Vehicle FamilyB

72、lue CollarLow-End and SingleVehicle FamilyAddition PurchaseConvenient and Economical ServiceFirst-Time PurchaseOfficial Network PointPastPresentUser/Product&ServiceUser/Product&ServiceApplies to most foreign carmakersEnd-User Sales of ForeignBrands 2017-2024(10,000 units)Average Discount at ForeignB

73、rands 2023-2024(RMB10,000)01000200020172018201920202021202220232024Foreign High-End BrandsForeign Volume BrandsForeign High-End BrandsForeign Volume BrandsForeign High-End BrandsForeign Volume BrandsForeign High-End BrandsForeign Volume BrandsNPS of Foreign Brands2020-2024Loyalty of Foreign Brands20

74、19-2024010202023Q12023Q22023Q32023Q42024Q12024Q22024Q32024Q4-20%0%20%40%202020212022202320240%10%20%30%201920202021202220232024Source:TYRIThe optimization of products and services at superior Chinese brandslike BYD,Li Auto and Xiaomi fully catered to new user needs,resultingin further diminishing po

75、wer of foreign brandsAlthough foreign carmakers have lagged far behind the evolution of Chinas car market when it comes to products and services,resulting in severely diminishing brand power.Superior Chinese brands like BYD,Li Auto and Xiaomi that have risen rapidly over recent years,however,catered

76、 to that evolution with the right products and services.Chinese brands proactively developed mobility enabling small vehicles and energy-saving large vehicles,and accelerated efforts to go high-end and also diversify sales networks,fully satisfying new needs from middle-aged buyers,middle-class buye

77、rs,female buyers and buyers buying additional vehicles;When your products and services are able to meet these new needs from users,sales and pricing will naturally be more stable.From 2020 to 2024,sales of Chinese brands doubled from less than 7 million units to nearly 14 million units.Though Chines

78、e brands like BYD,Geely,Chery,Li Auto and Xiaomi also offer various levels of discounts,they are much lower than discounts that foreign carmakers have offered;The power of Chinese brands has also risen significantly.As of the end of 2024,key metrics measuring brand power for Chinese brands such as l

79、oyalty and net promoter score(NPS)surpassed those for foreign brands.More and more Chinese car buyers today prioritize Chinese brands like BYD when they are on the market for NEVs.Some of them also prioritize Chinese brands when they are buying high-end and macho products.Middle-AgeEnergy-SavingLarg

80、e VehicleGo YoungEntry ICEVMaleFamily Economy VehicleFemaleMobility Enabling Small VehicleMiddle-ClassHigh-End and Multi-Vehicle FamilyBlue CollarLow-End and SingleVehicle FamilyAddition PurchaseConvenient and Economical ServiceFirst-Time PurchaseOfficial Network PointPastPresentUser/Product&Service

81、User/Product&ServiceApplies to most foreign carmakersApplies to superior Chinese brandsEvolution of Chinese Car Buyers/Product&ServiceEnd-User Sales of ThreeMajor Brand Types 2017-2024(10,000 units)NPS of Three Major Brands2020-2024Loyalty of Three Major Brands2019-2024Average Discounts atThree Majo

82、r Brands2023-2024(RMB10,000)Chinese BrandsForeign Volume Foreign High-End BrandsChinese BrandsForeign Volume Foreign High-End BrandsChinese BrandsForeign Volume Foreign High-End BrandsChinese BrandsForeign Volume Foreign High-End Brands01000200020172018201920202021202220232024010202023Q12023Q22023Q3

83、2023Q42024Q12024Q22024Q32024Q4-20%0%20%40%202020212022202320240%10%30%20%40%201920202021202220232024Source:TYRISource:TYRIMainstream brands denote those with end-user sales of more than 30,000 units in China in 2024Foreign brands still dominate the top 20 mainstream brands in desire forbrand in Chin

84、a in 2024,and therefore still comman certain brand powerOver the past few years,because their products and services were upgraded to better meet user needs,Chinese brands not only witnessed significant growth in sales but also in branding.Many Chinese car buyers only consider BYD when buying EVs and

85、 only TANK when buying off-road vehicles.In 2024,many Chinese brands like Xiaomi,AITO,LYNK&CO,Hongqi and ZEEKR moved into the list of top 20 brands in desire for brand;Though Chinese brands saw significant improvement in their brand power,they as a whole have not surpassed the foreign carmakers.The

86、list of the top 20 mainstream brands in desire for brand in 2024 was still dominated by foreign carmakers,and in particular the top 10 was predominantly foreign brands,with Porsche leading the way followed by Tesla.Strong foreign brands like Toyota,VW,Honda,Audi,Mercedes and BMW all made it to the l

87、ist;Over the next few years,as long as foreign carmakers strive to upgrade their products and services to meet the needs of middle-aged buyers,female buyers,middle-class buyers and buyers looking to trade-in for new vehicles or buy additional vehicles,their brand power could return to prominence and

88、 help improve core metrics such as sales and profitability.Slap a VW logo on a BYD or an Audi logo on a Li Auto,sales might even be higher.Top 20 Mainstream Brands in Pre-Purchase Desire for Brand 202480.30%79.56%78.39%77.92%75.78%75.28%74.25%73.68%73.51%73.43%72.73%72.54%72.02%71.81%70.84%70.49%70.

89、30%69.89%69.16%69.03%PorscheTeslaXiaomiLand RoverJETTAMercedesBMWAITOToyotaLexusLYNK&COHongqiAudiZEEKRVWNIOBYDVolvoLi AutoHondaAs of early 2025,foreign carmakers had fallen further behind Chinesecarmakers in electrification and smartificationForeign carmakers might still have relatively strong brand

90、 power.But how long can that continue?In the all-important electrification race track,Chinese carmakers are further ahead of their foreign counterparts:from 2017 to 2024,NEV penetration among Chinese carmakers steadily rose to nearly 70%,while that among foreign carmakers reached only 13%as most for

91、eign carmakers still predomi-nantly sell ICE vehicles;in early 2025,VW has put significant efforts into the marketing of EA888 engine,which is significantly more powerful than comparable ICE vehicles but lack competitiveness compared to core metrics of electrified powertrain such as power,torque and

92、 energy consumption;from 2025-2026,foreign carmakers like VW are also accelerating efforts to launch NEV products,but those efforts still pale in comparison with their Chinese counterparts.Following BYDs decision to become a dedicated NEV manufacturer in 2022,more mainstream Chinese carmakers will l

93、ikely do the same in 2025-2026;In the equally important smartification race track,Chinese carmakers are also extending their lead over their foreign counterparts:on February 9,2025,Changan officially announced its“Beidou Tianshu 2.0”smartification strategy,where Changan will no longer develop non-in

94、telligent products as of 2025,launch 35 digital and intelligent vehicles over the next three years,achieve all-scenario Level 3 autonomous driving in 2026 and all-scenario Level 4 autonomous driving in 2028;A day later,BYD officially introduced its“Gods Eye”advanced intelligent driving system equipp

95、ed on all of BYD brands vehicles,including the first 21 models priced above RMB100,000 that will have these features as standard.In early March,Geely Auto will announce its AI smartification strategy.Other Chinese carmakers like Chery and Great Wall Motor are also actively planning similar strategie

96、s.Bogged down by their lack of local R&D capabilities,most foreign carmakers are still finalizing their smartification plans.NEV Penetration Foreign Vs.Chinese Carmaker 2017-20240%10%20%30%40%50%60%70%80%20172018201920202021202220232024Chinese CarmakerForeign CarmakerPowertrain Comparison VW 5 -Gen

97、EA888 2.0T vs.CompetitorsWLTC FuelConsumptionL/100kmTorque(Nm)Power(kW)Model8.3540020025 Teramont PRO 2.0T8.740019023 BMW X5 2.0T6.4225 Engine+315 Motor115 Engine+200 Motor25 Xia 1.5T 100km7.5245 Motor/620 Motor113 Motor/330 Motor24 Li L8 1.5TthVW New Model Rollout Plan 2025-2026PowertrainModelLaunc

98、h Time300TSI/330TSI/380TSIFAW-VW Tayron L20251.5T Evo2FAW-VW Sagitar L5th-Gen EA888 2.0TFAW-VW New Talagon5th-Gen EA888 2.0TSAIC VW All-New Teramont Pro1.5L&1.5TSAIC VW All-New Lavida1.5T Evo2SAIC VW Lamando LSingle Motor+Dual MotorVW Anhui All-New SUV Single-Speed DHTSAIC VW All-New Midsize Car2026

99、EREVSAIC VW All-New Large SUVBEVSAIC VW All-New Midsize SUVPHEVFAW-VW All-New Midsize CarPHEVFAW-VW All-New PHEV SUVPHEVFAW-VW All-New PHEV SUVBEVTwo Midsize Vehicles(VW&Xpeng)Foreign carmakers might reach a critical threshold in their brandpower in 2025-2026 and should be vigilant of their market s

100、harepossibly falling below 20%The desire for brand in Chinas car market in 2024 was quite high at 68.35%,but the significant fall in metrics such as loyalty and net promoter score(NPS)at foreign brands over recent years have seriously dented their brand power as most of them including VW,Nissan,Audi

101、 and BMW confronted falling sales as well as pricing;Referencing on current mainstream perspectives on brand building and integrating TYRIs own comparative advantage,we explored breakthrough points of foreign carmakers branding improve-ment through users behind the products and services;Based on ana

102、lysis from a user perspective,we find that in recent years Chinas car market has been increasingly dominated by middle-aged buyers,female buyers,middle-class buyers and buyers looking to trade-in their existing vehicles for new ones or purchase additional vehicles,which has resulted in new desire fo

103、r products and services surrounding energy-saving large vehicles,mobility enabling small vehicles and convenient and economical service points.But foreign carmakers are still heavily skewed toward a“go-young”tactic and trying to address first-time buyers as well as over proportionate amount of male

104、and blue collar buyers,while products and services are limited to traditional characteris-tics such as affordable economy vehicles,bland designs and comprehensive service points,resulting in significant slide in sales and profitability as well as diminishing brand power.Meanwhile,superior Chinese br

105、ands like BYD,Li Auto and Xiaomi have improved their products and services geared toward new user needs,resulting in significant rise in sales and profitability as well as brand power,to the point where certain Chinese car buyers only consider BYD when making an NEV purchase;Though foreign carmakers

106、 still dominate the list of top 20 mainstream brands in desire for brand in China and still command certain brand power,as of early 2025,they have fallen further behind Chinese brands in terms of electrification and smartification.From 2025 to 2026,though foreign carmakers like VW,Toyota,Honda and F

107、ord all have significant tactics in place,Chinese carmakers will not rest on their laurels and will further up the ante in their efforts to go high-end and offer more energy-saving vehicles with better smartification features.Over the next 5-10 years,middle-aged buyers,middle-class buyers and buyers

108、 that trade-in their vehicles for new ones or purchase additional vehicles will dominate Chinas car market,while female buyers will account for a significant share of sales.Given their current momentum,Chinese carmakers will further distance themselves from their foreign counterparts;From 2020 to 20

109、24,mainstream foreign carmakers were able to largely offset market pressure through their brand power.But from 2025 to 2026,this brand power may further decline to a critical threshold.The market share of foreign carmakers in China in 2024 fell to just over 40%,will it drop further to below 20%in 20

110、25-2026?They need to seriously think about the“in”in their“in China for China”strategy:is it just tiptoeing or is it all in?Evolution of Chinese Car Buyers/Product&ServiceBranding vs.Sales SchematicPastPresentFuture(5-10 years)User/Product&ServiceUser/Product&ServiceUser/Product&ServiceMiddle-AgeEne

111、rgy-SavingLarge VehicleFemaleMobility EnablingSmall VehicleMiddle-ClassHigh-End&Multi-Vehicle FamilyAdditional PurchaseConvenience&Economical ServiceApplies to most foreign carmakersApplies to superior Chinese brandsGo YoungEntry ICEVMaleFamily EconomyVehicleBlue CollarLow-End and SingleVehicle Fami

112、lyFirst-Time PurchaseOfficial Network PointMiddle-AgeEnergy-SavingLarge VehicleFemaleMobility EnablingSmall VehicleMiddle-ClassHigh-End&Multi-Vehicle FamilyAdditional PurchaseConvenience&Economical ServiceSalesABThresholdBrandL2/Chinese BrandsTrajectory inRecent YearsL1/ForeignBrands Trajectoryin Re

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115、ly TYRI does not publish reports for commercial purposes,we mainly helpempower customers like OEMs and dealers;TYRI prides itself on its rich data and the ability to speak the facts based on these data;Everyone has different views,therefore we welcome comments and feedback onour own views.Lets agree

116、 to disagree.TYRI positioning:non-commercial digital car market think tankTYRI mission:help Yiche customers better understand Chinascar marketCommunications(Media,etc.)Extract（Survey/Consulting/Association/Investment Banking）Target Audience（OEM/Dealer/Investment）Traffic,Leads,Conversion,TransactionA

117、d,Membership,Collection,ActivityReceive Basic InformationGain Core PerspectivesReport,Advisory,Suggestion,Diagnostics,SystemInfo,etc.ServiceFeeGain Trust&CustomersShare Knowledge&OpportunitiesShareKnowledge&OpportunitiesGain Trust&CustomersGain Trust&CustomersShareKnowledge&OpportunitiesNew Species(

118、non-commercial digital think tank)Pro:WideAudienceCon:Limitedin DepthNature:TrafficConversionEffect:BoostSalesPro:Complementary;Con:Cooperation LimitedNature:Communication of Views;Effect:Elevate InfluenceThe media&thepressarestrengtheningdataanalysisandindustry authority,as well as elevatingcoopera

119、tion withOEMs.Caseinpoint:TengYiforming TYRI.Entities likeconsulting firmsarestrengtheningdata miningcapabilities andindustryauthority,andimprovingindustrycredibility andcustomerinfluence,likethe McKinseyQuarterlyValue：Guidancefor the massmedia:realize long-term interaction;Cooperationforcommercial

120、extraction:facilitate long-termcollaboration;Trust for customers:build long-termcooperationTraits:CommunicationsConsciousness,ExtractionCapability,Audience BaseAuto Industry Dialogue Tour Insights Clear as Blazing FireCore Topic:Creating a SegmentationSpecific EcosystemTime:December 2024-April 2025T

121、arget:primarily TengYi customersincluding OEMs,one on one discussionSignup on WeChat:yicheresearch(please provide name,position,company and cell phone#)-a New Book from TengYi Research Institutes Industry Analysis Series gives a deeper look into the past,present and future evolution of Chinas car ma

122、rket centered on specific user segments,thereby empowering core components of carmakers including strategic planning,product optimization and sales&marketing.How to get your book:OEMs,dealers and TengYi customers shouldcontact their TengYi service personnelNon-TengYi customers please contact TYRIdir

123、ectly(WeChat:yicheresearch)From December 2024 to April 2025,TYRI will kick off its 9 round of“Insights Clear as Blazing Fire”Auto Industry Trends&Analysis Dialogue Tour,covering the core topic of“creating a segmentation specific ecosystem”to help carmakers capitalize new opportunities presented by new market trends.thDemystifying Chinas Auto MarketDemystifying Chinas Auto Market(2024 Edition,Part II)Contact UsFollow UsWeChatJuns Market TalkBenya Shi，Industry AnalystMobile：188 0118 7009Mail：WeChat：yicheresearch