What about a premium second-hand vehicle?


Well, here we need to talk about one of the major reasons why consumers in China purchase a premium vehicle: earning “Mianzi” (face).

Mianzi/Face is a sense of worth that comes from knowing one's status and reflecting concern with the congruence between one's performance or appearance and one's real worth. (Definition quoted from Wikipedia). To simplify: I own a premium car = I have money = I am as valuable as my peers or I am richer/better than others.

Consumers of new premium vehicles could be roughly clustered into four groups :

  • People who have money and have been rich for a long time, for example, born in a wealthy family. They purchase a premium car because of its good quality and user experience, it is less about showing off, the vehicle is not a strong status symbol (taste for watches and hobbies, as well as achievements of their children are). They do not need an expensive car to prove their value. But this group is still rare.
  • People who work very hard in a big company and have become a high-level manager because of their strength. They purchase a premium vehicle as a reward for themselves, it is the symbolic start of a better life. They get to know new friends at this high level, and it is important to indicate that they belong to the new peer group. I own a premium car like my friends = I am as valuable as my peers.
  • People who come from a poor village/family, with low education level. They started to do little business to improve their financial situation, working extremely hard and finally start to get a bit richer. They purchase a premium vehicle for two reasons: 1. Using the expensive car to indicate their business partner they are doing a good business, thus it is a good choice to work with them compared to others. 2. Telling all their old friends they have become richer and live a better life. I own a premium car = I am richer and better than others.
  • Government employee with business cars.


So first of all, there is no 100 % new second-hand premium car like in Germany, the so-called   “Tageszulassung”.


A second-hand car is a car being driven, usually for several years with different damages.  A lot of car owners and dealers will try their best to hide this kind of harmful fact, they do their job so “good” that a lot of people have been cheated. In general, a second-hand car in China has a rather bad reputation.


Now let’s go back to the four types of premium car buyer:

  • Born in a wealthy family: As they do not lack any money, they do not need a second-hand car.
  • High-level manager: They have saved enough money and a premium car is a reward. In this case a reward should be something high-quality without damages. The symbol of the start of a good life should be a nice event instead of fighting against a dishonest seller.
  • Small business owners: They might have money sometimes, sometimes they might not. But they do need a premium car to prove their trustworthy financial situation, that is the main purpose of a premium brand. The car will mainly be used for visiting business partners and clients.
  • Government employees: they have enough budget to indulge themselves with something nice.


What does that mean for car manufacturers who plan to expand the second-hand vehicle business?

  1. Target the right potential customers: They might not be the top rich customers, they might not be well educated, they might not live in the tier 1 cities.
  2. Second-hand cars have an extremely bad reputation in China, a trustworthy dealership is a key factor. A directly brand owned dealership is a good start, the suspicious Chinese customers need to find something they already trust. But still, there is a long way to go.


If you are interested to get more insights about the topic above and would like to conduct relevant customer market research, please feel free to contact Spiegel Institut.


Author: Yue Liu, Spiegel Institut Mannheim

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