According to the statistics of the Ministry of Public Security, by the end of 20 19, the number of motor vehicle drivers in China was 397 million, accounting for 18-25 years old, accounting for about 48 million. The survey results show that nearly 80% of Z generation users are willing to buy a car, which means that there will be nearly 40 million potential car demand in the next five years. Because most of them prefer to borrow money to buy a car, which will bring huge market value to auto finance. Therefore, car companies need to think urgently: how to do a good job in auto finance business and attract the "Z generation", a group of "potential stocks" in the auto market?
Generation Z refers to people born between 1995-2009, also known as the Internet generation and the Internet generation. In the next five to 10 years, they will step into society and work in an all-round way and become the main consumers. Based on this, car home teamed up with Deloitte, a global consulting firm, to launch the Insight Report on the Automobile Consumption of Generation Z in China in 2020, to conduct online and offline research on the automobile consumption attitude of Generation Z, and to publish a series of articles on "Young People of this Year".
Based on the fields that young people love more, such as tourism, used cars and auto finance. We also invited senior practitioners in the automobile industry to write papers, analyze the development status of the above-mentioned businesses, and give suggestions for the next steps of automobile enterprises. Zhou Min, an industry commentator in this issue, is known as Yan Shizhou in the industry. He once worked in China Automobile, Huitong Xincheng, Pioneer Taimeng and other first-line companies, and had deep industry research on automobile dealers and automobile finance. Good at analyzing the automobile industry from the financial point of view.
How do Generation Z who have no money tend to buy a car?
Under the high demand for car purchase, Generation Z is also facing the dilemma of relative lack of funds. At this time, it is a good choice to make good use of the automobile consumption finance scheme. At present, domestic auto finance purchases cars by stages, which can be roughly divided into three types of financial products from the perspective of fund providers, namely: auto finance companies, bank auto staging and financial leasing, and Generation Z prefers the former.
According to the survey data, the proportion of Z generation users who choose the full car purchase method is less than that of non-Z generation, accounting for only 38%; More users consider using vehicle loans to buy cars, accounting for over 60%. Generation Z after 1995 usually has a low income, a strong sense of advanced consumption and a rational demand for car purchase, so the demand for financial solutions with low down payment is obvious.
In the choice of financial services (multiple choices), whether it is the first insurance, renewal or extension of auto insurance, users who only choose 4S shop channels are higher than non-Z generation users. Specifically, in terms of auto insurance first insurance, 54% of Z generation users only choose 4S shop channels, which is higher than 47% of other groups; In terms of auto insurance renewal, 38% of Z-generation users only choose the 4S shop channel, which is higher than 3 1% of other groups. In terms of auto insurance extension, 42% of Z-generation users only choose the 4S shop channel, which is higher than 34% of other groups. ?
The above two sets of data, on the whole, show the rational cognition of Z generation on the concept of automobile consumption, and the demand for the right to use is gradually higher than the ownership, which also provides fertile soil for the long-term development of rich and flexible automobile finance, financial leasing and * * * enjoyment of automobile products.
What are the difficulties faced by auto finance at present?
In 2004, since the establishment of GMAC, the first domestic auto finance company, the domestic auto finance industry has entered a new development period. China Banking Regulatory Commission has approved 25 auto financing companies. At the same time, major banks, financial institutions, financial leasing companies and internet finance companies have also entered the auto finance market.
After more than ten years of development, the financial penetration rate of new cars in the whole industry is close to 50%, and the market scale has exceeded one trillion. However, compared with foreign mature markets, domestic auto finance products are relatively single, and the financial penetration rate of new cars still has a lot of room for improvement.
The penetration rate of domestic auto finance is much lower than that of developed countries such as Europe and America, and even lower than that of India, which is also a developing country. The reasons are as follows: First, residents' consumption habits are different, and China consumers' concept of deposit far exceeds that of Europe and America, and their consumption is more rational; Second, the development stage of the automobile industry is different. In recent years, the automobile industry has achieved rapid development, but the development of related derivative industries is still relatively backward, and automobile finance is one of them. Third, the automobile finance foundation is weak. Because the real development time of auto finance is relatively short, and the products are not rich enough, some customers with loan needs cannot get corresponding financial services to some extent. The fourth factor is economic development.
However, with the improvement of people's living standards, disposable income is also increasing, and automobile consumption will promote the upgrading of consumer groups and products, and the role of automobile finance will become more and more significant. By subsidizing the interest of high-quality customers, OEMs can effectively stimulate and release the consumer demand of customers.
At the national policy level, in the Measures for the Administration of Automobile Loans revised by the Central Bank in 20 17, the maximum proportion of loans for self-use traditional power vehicles was raised to 80%, and the maximum proportion of loans for self-use new energy vehicles was raised to 85%, effectively lowering the threshold for car purchase and effectively inciting the trillion-dollar automobile finance market.
How do auto companies lay out auto finance?
Generation Z, who is "living in the present", will soon become the main force of car purchase, and will further promote the development of auto finance business in China. Therefore, at this stage, both car companies and dealers need to accelerate the layout in advance.
On the one hand, enterprises can make more flexible car purchase plans. After all, the economic strength of Generation Z is limited. How to effectively reduce the threshold of car purchase, in addition to developing more people-friendly models, we need to give more flexibility and flexibility in the car purchase plan. In the short term, reducing the cost of building cars in production links, reducing intermediate links and reducing middlemen's earning manufacturers can only cure the symptoms, and it is imperative to make rational use of financial leverage.
In recent years, various "zero-interest" and "low-interest" products have been launched for OEMs and auto finance, attracting many consumers and effectively helping the development of the auto market. For Generation Z, OEMs and 4S stores should also pay more attention to how to customize personalized financial solutions for young people to help them realize their dream of buying a car.
On the other hand, financial leasing may also usher in a sudden emergence. The car financing leasing business takes property rights as the main monitoring object. Before the customer pays off all the rent, the ownership belongs to the lessor, which can effectively restrain the illegal behavior of both parties to the transaction. It can not only buy a car with a low down payment, but also achieve the threshold of "zero down payment", which is deeply loved by young people.
Since 20 18, on the basis of the original auto financing companies, major OEMs have set up auto financing leasing companies one after another, and combined with the experience of mature foreign markets, it is a good move to provide more financial car purchase solutions for emerging customers. However, in the actual market operation for two years, the design and application of financing lease products of OEM system are very similar to the original automobile financing scheme, which fails to attract the attention of 4S shop dealers from the mode, fails to effectively combine financing lease with automobile salvage value and secondary purchase, fails to effectively solve the diversified choices of emerging automobile consumers, and encounters development bottlenecks.
According to international experience, in the consumption-driven stage, residents' borrowing and consumption will become an important force to support consumption. Data show that by 2025, China's consumer loans will also reach nearly 100 billion. Borrowing consumption will become an important part of China's consumption in the future. Generation Z is a generation that grew up by borrowing. When becoming an army of car buyers, enterprises must learn how to deeply study and tap the car consumption habits and car demand of generation Z, and design financial leasing products that are more in line with young people in the domestic market.
Full text summary:
In recent years, the automobile industry in China has entered a transitional period, and the consumer structure is also changing. Generation Z has gradually occupied the right to speak in the automobile market, which has brought about the reshaping of the business environment of automobile enterprises. It will not only affect automobile consumption, but also bring new vitality to automobile finance business. The penetration of finance into the automobile industry has gradually deepened, and it has become an important direction of automobile development in the future to combine with the financial industry and seek benefits from the financial field. Automobile finance and insurance have become an important supplement to obtain the value of the whole automobile industry chain. Whoever occupies this part of the market first will gain the opportunity of a new round of "war" in the automobile market. (Text/car home Industry Commentator? Zhou Min)
For the full version of "Young People-Insights into the Car Consumption of Generation Z in China in 2020", you can follow the official WeChat account of "Car Market Story" and download the electronic version directly.