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China New Mobility Study Summary (2015)

Core Content

This study by Bain & Company explores the evolving landscape of urban mobility in China's mega-cities and identifies key trends and consumer segments that are influencing the demand for traditional car ownership and new mobility solutions.

Main Trends in China's Urban Mobility

1. Fast Urbanization

   • Drives population growth, increases car ownership, and extends commuting distances and times.

2. Deteriorating Driving Conditions

   • Traffic congestion, road safety issues, and lack of affordable parking negatively impact the driving experience.

3. Increasing Environmental Pressures

   • Air quality concerns raise awareness of the role of cars and openness to alternative solutions.

4. Tightening Regulations

   • Governments are implementing policies to control car ownership, restrict road access, and promote low-emission vehicles.

5. Improving Public Transport

   • Major infrastructure investments have enhanced the coverage, reliability, and comfort of rail and bus systems.

6. Fast Penetration of New Technologies

   • Mobile applications for planning, booking, and enhancing mobility experiences are becoming increasingly popular.

Key Findings

• Car Ownership is Losing Appeal

  • In China's mega-cities, car ownership is becoming less attractive due to deteriorating driving conditions, tighter regulations, and rising costs like gasoline prices.
  • Traffic congestion and higher gas prices are the two major factors that could lead people to stop owning or buying cars.

• Shift in Consumer Values

  • Urban consumers now prioritize safe, on-time, flexible, and reliable mobility over car ownership as a status symbol.
  • Cars are losing their status as a symbol of social standing, especially among younger and more economically conscious segments.

• Consumer Segments
  The study identifies six distinct customer segments based on their mobility needs and behaviors:

  Segment	Characteristics
  Economic Traveler	37% of car owners, 39% of non-car owners; oldest segment; lowest income; least interest in new mobility
  Switcher	22% of car owners, 20% of non-car owners; youngest segment; relatively high car usage; high interest in new mobility
  Car-averse Consumer	12% of car owners, 19% of non-car owners; lowest income; lowest car usage and interest in new mobility
  Smart Traveler	12% of car owners, 8% of non-car owners; young and high income; high current usage of new mobility
  Convenience-focused Traveler	10% of car owners and non-car owners; middle age, high income; high usage of both private and public mobility; high interest in new mobility
  Status Seeker	7% of car owners, 4% of non-car owners; older, high income; strong perception of cars as a status symbol; highest interest in new mobility

• Risk of Giving Up Cars

  • The Convenience-focused, Economic Travelers, and Switchers are most likely to move away from car ownership if conditions worsen.
  • 10% to 30% of current car owners would consider giving up their cars if traffic conditions significantly deteriorate or gas prices rise sharply.

• Opportunities for OEMs

  • OEMs have a unique opportunity to develop mobility solutions tailored to China's specific needs.
  • They should focus on customer loyalty in core automotive business and explore leasing and flexible models to attract new customers.
  • New mobility solutions must address safety, flexibility, and integration with local infrastructure, such as parking and public transport, to compete with low-cost alternatives like taxis.

Key Insights

• Public Transportation is Improving

  • Continued government support will enhance the reliability and comfort of public transport, making it a more viable alternative to car ownership.

• New Mobility Solutions are Emerging

  • While Chinese consumers are relatively unfamiliar with car-sharing models, they are keen to use public transport and alternative mobility solutions in the future.
  • The study shows a growing interest in car-sharing, e-car rental, taxi, and mobility platforms that enable planning and booking of trips.

• Consumer Awareness and Adoption

  • The majority of Chinese consumers are open to the idea of new mobility concepts becoming a significant part of their urban travel in the next three years.
  • However, car-sharing remains the least familiar model, indicating a need for greater education and marketing.

Conclusion

China's urban mobility landscape is undergoing significant transformation due to rapid urbanization, deteriorating driving conditions, environmental pressures, and tightening regulations. These trends are reducing the value of car ownership and increasing the appeal of new mobility solutions. OEMs are challenged to adapt their strategies to this evolving environment while protecting their core automotive business. The study highlights the importance of understanding consumer segments and developing mobility solutions that align with their values of safety, convenience, and flexibility.