Why People Actually Buy Cars Online in China
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Volkswagen sold more than 3 million cars in China last year, beating out General Motors as the top foreign automaker. The German automaker has a long history in China, but it also offers a case study about what can happen when brands break free of Western conventions.
For example, virtually all new car buyers in the U.S. do research online but completing the purchase is still done in a dealership. Very few of us can imagine buying a $50,000 car on the internet. Yet Shanghai VW, a joint venture with SAIC Motor, a Chinese state-owned car company, now does just that. (To keep dealers happy, it made sure to seek full dealer support when implementing an online sales strategy.)
When VW first set up local operations in China in the 1980s, the puzzle was how to sell foreign cars in a culture where more than 80% of purchase decisions are made by word of mouth. If brand reputation was the engine, how did you step on the gas? The answer finally came with the digital era.
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