Onboard internet connectivity tops auto buyers' wish list

Traditional automakers are set to lose their Chinese customers－not to rival brands but to connectivity, consulting firm PricewaterhouseCoopers' 2016 survey shows.

The survey interviewed 3,000 car buyers on the Chinese mainland and in Hong Kong. It shows that what matters most for 51 percent of the respondents is onboard connectivity, which scored higher than price and even engine performance.

"The findings were surprising to us because tech aspects were never previously the selling points in the markets. The usual order in similar surveys was price, brand and then design," said Bill Peng, a partner of PwC's Strategy&.

What surprised the researchers even more is that 30 percent of mass-market car buyers and 40 percent of premium car buyers are willing to switch brands for better connectivity, even if it means paying 20 percent more.

The most frequently used internet-based functions in Chinese vehicles are realtime traffic information, radio, parking information and entertainment streaming. Around 80 percent of China's car buyers would like to upgrade to enhance their car's connectivity.

"So what makes a brand attractive is not the hardware, for example having a 12-inch screen onboard, but whether it can offer content that customers need," said Peng.

PwC attributes customers' emphasis on connectivity to the huge number of digital consumers in the country, tech firms' entry into the auto industry, as well as government policies, including the Internet Plus strategy the State Council released last year.

Statistics from the Internet Society of China show that there were 1.13 billion active smartphones in the country in 2015. In the same year, the population in China was 1.37 billion.

Internet giants are making inroads into the automotive industry. For instance, Baidu Inc is working on autonomous driving, Alibaba Group is joining hands with SAIC Motor Corp Ltd to produce internet-based cars, and Tencent Holdings Ltd is partnering with Foxconn Technology Group to produce electric, connected cars.

Marco Fischer, director of automotive and customer practice at PwC China's Experience Center, said those elements will put the country at the forefront of connected cars innovation.

"The challenge remains for the auto industry to adopt the right mix of technology that is fit for China's driving conditions and move toward dominating the global share of intelligent connected cars," he added.

The survey forecasts that global sales revenue in connected mobility will grow almost threefold over the next five years, from euros 47.2 billon ($51.4 billion) in 2017 to euros 140 billion in 2022.

Besides connectivity, Chinese customers are among the most eager to try new experiences and products, including autonomous driving. The survey shows that 85 percent of Chinese car buyers would be eager to own an automated car, despite recent fatal accidents involving Tesla Motors' vehicles.

Fischer said the figure is much lower in other parts of the world.

Of those who took the survey, 58 percent said they would use the free time to enjoy entertainment and 35 percent would dine or spend time with family, if they had fully autonomous cars.

Many companies are working on autonomous driving, including automakers such as Volvo Group and tech firms such as Google Inc. But, PwC believes that truly autonomous cars will not become a reality before 2025.

According to a road map the Ministry of Industry and Information Technology released on Wednesday, China will aim for 10 to 20 percent of vehicles to be highly autonomous by 2025, with 10 percent of cars to be fully self-driving in 2030.

The ministry expects those with semi-autonomous functions, such as driving assistance and autonomous parking, to account for 50 percent of cars by 2020.