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The Model S seems to be a good fit for the Chinese market, since the top five luxury cars sold in the country are all sedans. The Chinese consumer associates these sedans with success and business, and therefore they take great pride in driving a premium quality sedan. On the quality front, Tesla has been appraised around the world for the combination of sportiness, versatility, safety and environmental friendliness – which should also strongly appeal to the Chinese consumer.

 

Tesla’s largest obstacle in China is likely the lack of charging and service infrastructure and how to expand their existing network. To conquer the Chinese market, Tesla must develop their network of chargers, Service Centers and shops all over the country.

Based on our research, launching a SUV is likely to fill a growing demand of the market. More family oriented consumers showed a preference towards SUV, as they saw them as safer and practical due to the size and structure. The announced Model X seems to be able to address this demand in the future and with the right strategy in place, it seems to have a great potential in the Chinese market.

 

Currently, Tesla is viewed as an expensive luxury car, out of reach for the larger part of the Chinese middle class. On the medium to long term, more accessible offerings would enable Tesla to reach a larger share of the Chinese market and therefore to have a higher brand penetration across different segments. This is also coherent with Tesla’s plans for the coming Model III – a product expansion that is still 2-3 years away, purposefully to ensure that Tesla’s network and infrastructure is ready to handle a mass market demand.

 

The Tesla service

Tesla has to transfer their customer service policy to the Chinese market – if there is a need for service repairs, the repair should happen seamlessly. The car should be picked up and delivered at an assigned destination without demanding any extra effort from the customer. Also, The Supercharger stations should remain free of charge for Tesla owners.

If for any reason the customer is not satisfied with the purchase, Tesla allows, within a reasonable amount of time, the return of the car. With this policy, the goal is to build long term trust relationship and lower the perceived risk for the customer.

Internal marketing and staff training will be extremely important when going into the China market. Internal Marketing have to be used so all the employees understand what is that Tesla values and the Tesla way. Also, there must be processes in place to measure, improve and implement changes.

 

The Chinese luxury consumer expects premium treatment in every step of the buying process, something that currently lacks in the luxury car segment – there are great products, but the service continues to fall behind. Tesla has to utilize the resources they have already built in the US and Europe and develop systems for training and guidance for the Chinese employees; a large challenge has been training the service personnel for the Service Centers.

 

All these services combined will add on to the perceived value of the product and increase customer loyalty and satisfaction.

Product

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