On his first visit to the Peugeot SA (UG) dealership in Wuhan, China, Xu Zhongli spent hours asking questions and fiddling with cars. Over the next month, he returned for another four marathon sessions and also made several visits to a Citroen showroom. Neither dealer showed any signs of impatience with him, Xu says.
“I needed time to look at the models and consider the color,” said Xu, 41, a production supervisor, who finally settled on a 105,000 yuan ($17,000) silver Peugeot 308, his first car. “I had to negotiate the price, too.”
While the time needed to make a sale would be considered excessive in the U.S., it’s normal for Chinese car dealers to entertain multiple visits from prospective customers, who often bring along relatives and friends to give opinions and haggle over the price. About half of all auto purchases in China are made by first-time buyers like Xu, who have limited knowledge about cars, according to researcher Nielsen Holdings NV. (NLSN)
Automakers and dealerships go out of their way to make these newcomers feel welcome, offering manicures, movies and free food to keep them in showrooms as salespeople explain features.
“They go through a different process from what you’d see in the U.S.,” Nigel Harris, Ford Asia Pacific’s vice president of sales & service, said by phone. “Not only are they first-time car buyers, but their family hasn’t had the experience either.”
With more than 100 brands available in China, dealers come up with creative ways to ensure return visits.
At a Ford Motor Co. (F) showroom in Shanghai’s Pudong district, there’s an in-house manicurist and shoe-shiner. Singers perform at barbecues for customers, and periodically the dealer holds drawings for gifts such as iPads and TVs.
In Foshan, a city in southern Guangdong province, a Honda Motor Co. (7267) outlet holds talks on fengshui, shows recent hit films from Hollywood and Chinese studios, and offers massage chairs for relaxation.
The three-story Mercedes-Benz dealership in Shanghai’s Putuo district has a 12-seat theater (often showing movies that feature Mercedes vehicles), a cigar room for repeat customers, a library, a fitness center, and a game room that includes pool tables and driving games. At lunch, there’s a buffet with five different meat and vegetable dishes, and a full-time tea artist brews various types of Chinese tea.
Once a buyer has paid and the keys are handed over, dealers often festoon the car with huge ribbons, light strings of firecrackers, and snap commemorative photos -- all intended to make the customer feel important and respected.
Dealerships and automakers are willing to spend time and money to pamper first-time buyers and encourage repeat business and referrals, said Chin-Lim Ong, General Motors Co.’s China director of vehicle sales, service and marketing.
“It’s crucial to make sure customers have an exceptionally good experience” so they’ll recommend the dealership and brand to others, Ong said by e-mail.
Shanghai pub owner Yuan Guidi, 32, bought her BMW 3i sedan for 330,000 yuan ($54,000) last year from the dealer that sold a friend the same model.
“My friend loaned me the car and I thought it was pretty good, so I decided to buy one,” said Yuan. “I didn’t bother much about the details because my friend had done her homework when she bought her car, and I trust her.”
Given China’s size and diversity, the country’s hundreds of auto shows have become an important forum where first-time buyers can kick the tires of many brands at once. And for customers who can’t make it to shows or showrooms, automakers will go to them. General Motors Co. (GM) has mobile dealerships to bring in aspiring car owners, said Zhang Zhihong, director of brand planning at the automaker’s joint venture Shanghai GM.
The mobile showrooms “make it very convenient for potential customers to experience our products and make deals,” Zhang said by e-mail.
For Wu Jianlin, 43, the service shown by the salespeople on her four visits to a GM dealership two years ago helped seal her decision to buy a Buick Lacrosse.
“They answered all my questions on fuel economy and features and were very patient,” said Wu, who works at an insurance company in Nantong, about 80 miles north of Shanghai. The day she took delivery of the car, dozens of friends and family gathered to admire the Buick.
“I’m very proud to own a car,” she said. “It makes me look good in front of my colleagues, friends and relatives.”
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