In Beijing, Xinhuanet reports on November 28th. The Chinese automobile market in 2005 can be described as "subtle": although it wasn't as chaotic as the previous year, it also failed to recreate past glories. Launching new models, triggering price wars, and securing favorable deals became increasingly challenging. The market appeared to be at a crossroads, undergoing deep transformations and adjustments. Major car manufacturers faced critical decisions. However, as the year came to an end, looking back at the 2005 automotive marketing landscape, there were still some notable highlights worth reflecting upon.
**Reflection One: Hunger Therapy – The Oddity Is No Longer Effective**
Hunger therapy is essentially a marketing strategy targeting consumer psychology—where people are more inclined to buy when they feel scarcity. Car manufacturers would intentionally limit production to maintain control over the seller's market and maximize profits. This approach was highly effective initially. Even though the Chinese auto market remained relatively warm in 2005, the strategy reached its peak during the mid-year period.
Models like the Corolla, Scorpio, and Minda were in short supply. Guangzhou Honda had limited availability for most models except the Fit, while Changan Suzuki Swift, Geely Free Ship, and Chevrolet Epica were only available as prototypes. As a result, many popular cars saw their prices rise by several thousand yuan. FAW Toyota’s new Crown even experienced a maximum price increase of 15,000 yuan.
At first, this tactic seemed to work well, but by the end of 2005, hunger therapy had lost its effectiveness. More importantly, in pursuit of short-term profits, manufacturers were willing to sacrifice long-term customer trust. Some experts criticized this approach as irresponsible, arguing that consumers shouldn’t pay more for the same product without any improvements. This practice damaged brand reputation and eroded consumer confidence.
**Reflection Two: Buyout Sales – A Disguised Price Cut?**
In contrast to the hunger therapy, “buyout sales†involve local dealers purchasing large quantities of vehicles from manufacturers at favorable terms and then selling them below market price to boost short-term sales. In 2005, this method gained significant traction. For example, Shanghai Shenyin Auto purchased 3,000 POLO units for sale in Shanghai and North China, while Mapetech bought out the Hurricane series in Sichuan. Similarly, Beijing Shenlong Jingjin Automobile Sales Co., Ltd. acquired 50 extended Elysee VIP models.
The impact of such strategies was immediate. A Dongfeng Citroën store in Southwest China sold over 300 vehicles in one month, boosting sales by 200%. While this helped revitalize the market and eliminate some inefficient dealers, it also carried risks. These included fluctuating prices, unsold inventory, threats to new car sales, financial strain, and unpredictable buying behavior. Moreover, the model clashed with existing manufacturer-controlled sales structures, making it difficult to implement on a large scale. Therefore, buyout sales could not become the dominant strategy in China’s auto market.
**Reflection Three: Emotional Marketing – Capturing the Consumer’s Heart**
While technology, quality, and pricing remain important, the core of successful marketing lies in understanding and connecting with consumers. Beijing Hyundai is a prime example of emotional marketing success. During 2005, the company launched various campaigns that resonated with customers.
From September 25 to October 15, Beijing Hyundai offered free testing services with 18 different travel-related items, creating a sense of care and surprise. From October 1 to December 31, they held the “100 Lucky Passengers, 5th World Cup Tour†event, selecting 100 lucky owners for a free trip to Germany in June 2006. These efforts reflected a strong customer-centric approach, ultimately strengthening brand loyalty and demonstrating the power of emotional engagement in marketing.
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