BMW Studies China to Forecast Global Consumer Trends

It's one thing to use China as a manufacturing platform or as a fast growing new market, but BMW believes Chinese customers may be giving it crucial insights into global consumer trends.

The juxtaposition is jarring. Only a few years ago, Chinese consumers had neither the money nor the experience to do much more than yearn for luxury vehicles. And their economy, while increasingly private in some respects, still reported to a strong, central Communist government. As in so many other fields, they learned fast.

So fast, that their fresh approach to features and uses may be changing the way one of the world's premier companies conceives, designs and delivers product, not just to that country, but to the entire world. The change has to do with the exponential growth and scale of China's middle class. Unfettered by generations of traditional attitudes towards automobile ownership, especially of luxury vehicles, BMW's Chinese customers have adapted the auto to their own needs and desires. In that, the company believes may be better information about where the global market is going than Europe or the US can provide. The fact that Chinese prefer leaving voice mail messages rather than texts opens up new possibilities for electronic features which offer consumers greater satisfaction - and the manufacturer higher margins.

The more important lesson, however, may be that BMW has recognized the value in neither stereotyping or taking for granted new customers. Being open to learning from consumers, however inexperienced, rather than assuming it can and should teach them may be a source of growth and increased profitability as new markets flourish while old ones languish. That receptivity to new sources of knowledge may be the most valuable asset BMW has acquired in China or anywhere else. JL

Luca Ciferri reports in Advertising Age:

BMW is studying ways to meet the fast-changing demands of its customers in China to better serve the world's largest auto market and to determine whether trends there -- such as teledining and a heavy reliance on voice messaging -- will expand globally.
"Young Chinese consumers have very different behaviors from Europeans and we are here to learn and to find a way to properly fulfill their expectations," said Alexis Trolin, head of the BMW Group ConnectedDrive Lab in Shanghai.
Meeting those needs is crucial to BMW, which is counting on strong demand in China to offset weak sales in Europe. In the first three months of the year, BMW sales in China rose 7% to 80,570 units. To maintain momentum in China, BMW is counting on people such as Mr. Trolin, a 43-year-old Stockholm native who helped open the China unit of ConnectedDrive in 2011.
Mr. Trolin said that teledining has become popular with people who don't want to lose time traveling to megacities to eat with friends. Teledining allows one group eating at a restaurant in one city to connect with friends in a different city via teleconferencing. Young people in China also prefer to leave voice messages rather than texting or e-mailing.
"A voice message is more lively than a text and can be listened to at the recipient's convenience, while a call could come at an inappropriate moment," said Mr. Trolin, who joined BMW in 1997 after serving as a submarine navigation officer in the Swedish navy.
After two years in China, Mr. Trolin said he is accustomed to using his phone mainly to send and receive voice messages.
He declined to say what BMW will do to tap into these trends, but history shows that the automaker is willing to cater to Chinese tastes. For instance, BMW offers long-wheelbase versions in China of several models.
"Chinese customers also look for long-wheelbase versions of mid-sized and compact sedans not because they are chauffeur driven but to offer more legroom to their friends and family members as a sign of high respect," said Gerhard Steinie, director of the Shanghai studio of BMW Group's DesignWorks subsidiary.
To understand why convertibles are rare in China one only needs to look at Chinese house gardens, he added. These gardens are always in the center courtyard of the building, making them difficult or impossible to see from the outside.
"In a convertible, you are too exposed," Steinie said.
One of BMW's biggest challenges is getting its in-car systems to work properly despite the fast-changing road network of China's megacities, the growing number of cars on the road and the high percentage of young, inexperienced drivers.
For instance, Carsten Isert, head of the 6-month-old BMW Group Technology office in Shanghai, is trying to adapt the automaker's speed limit sign recognition system to Chinese roads, where speed limits can vary depending on the lane.
"When a navigation or active safety system is able to adapt to signaling and driving behaviors of China," Isert said, "it will be flawless all around the world."