China’s connected car market to be at the forefront of global innovation

40 percent of Chinese car buyers willing to switch car brands for better connected technology

Hong Kong, 25 October 2016

- Chinese consumers place more emphasis on in-car technology than on price or engine performance when it comes to buying a car, and 40% are willing to change brands for better connectivity, according to PwC’s 2016 ‘Connected Car Customer Survey’ in mainland China and Hong Kong.

The findings indicate that more than 75 percent of Chinese car buyers would be willing to increase spending on safety features, while 60 percent would pay more for vehicle management features that monitor usage, run diagnostics, and record accident data.

“With China’s tech-savvy consumers, governmental support and growing affluent population who are highly receptive to owning connected cars, China is expected to be in the forefront of connected car innovation. The challenge now remains for the auto industry to adopt the right mix of technology fit for China’s driving conditions and move towards dominating the global share of intelligent connected cars,” said Marco Fischer, Director of Automotive and Customer Practice, Experience Centre, PwC China

These figures come on the back of surging global sales volumes in connected car mobility, forecasted to grow by almost threefold during the next five years, from €47.2bn in 2017 to an expected €140bn in 2022, notes the survey.

More than 85% of Chinese car buyers would be eager to own an autonomous car, indicating that a majority of consumers trust vehicle technologies with strong desires to transform their driving experience. Similarly, car buyers cited their major concerns relating to autonomous driving to be 91% safety concerns, 86% cyber security, 83% the legal implications, while 80% cited cost.

Meanwhile, 80 percent of China’s car buyers would proactively look at purchasing upgrades to enhance their cars’ connected functions. Chinese consumers rank safety-related features such as collision prevention, danger warning, and emergency calling highest on the list of connected car offerings, followed by infotainment, navigation, vehicle status, and maintenance features.

China’s largest internet and technology players are already shaking up the automotive industry by accelerating new technologies to develop smart operating services and features for connected cars and autonomous driving.

“To gain a competitive advantage against new entrants from technology companies, traditional automakers must identify the right, strategic partnerships between technology companies and auto-manufacturers in order to gain access to technologies. This will determine which brands can establish an eco-system of connectivity that can transform the driving experience of China’s digitally sophisticated consumers,” said Bill Peng, Partner of PwC’s Strategy&.

Will China be the fastest innovator?

In 2015, the country’s State Council announced its latest 10-year plan, Made in China 2025, with the goal of transforming the country into an innovation hub across a variety of sectors, including the auto industry. As a result, Chinese car buyers are already anticipating the imminent arrival of the fully connected car, supported by government policy for domestic companies working on connectivity and renewable-energy technologies, with the hope of making them industry leaders, both locally and globally.

PwC’s 2016 Connected Car Customer Survey findings are based on more than 3,000 responses from car buyers across mainland China and Hong Kong, adding to the findings from the global ‘Connected Car report 2016’, published by Strategy&, PwC’s strategy consulting business. The survey sheds light on attitudes to ‘connected car’ technology and the integration of digital connectivity within cars. Connected cars are defined as having access to the Internet and a variety of sensors, and thus able to send and receive signals, sense the physical environment around them, and interact with other vehicles or entities.

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