While in purchase of new cars, Honda and Maruti Suzuki rank the highest it was found that 13% of new vehicle buyers also consider the purchase of a used vehicle somewhere through the purchase process. It has been noted that there is a 10% increase over the past three years in this category. Purchases for used cars over the internet during shopping have also seen a marked increase in recent times. Here buyers can search for information regarding a particular vehicle be it in the form of financing, trade options and service aspects.
It is for this reason that many companies have authorized used car outlets which offer used and second hand vehicles with a manufacturer’s warranty. These automakers post real time information about the used vehicle including prices which also serves as a major attraction for customers.
Vehicle Shoppers Are Increasingly Considering a Used Vehicle during the Shopping Process in India
Honda and Maruti Suzuki Rank Highest (in a tie) in New-Vehicle Sales Satisfaction among Mass Market Brands in India
Vehicle shoppers in India are increasingly considering a used vehicle during their shopping process for a new vehicle, according to the J.D. Power Asia Pacific 2013 India Sales Satisfaction Index (SSI) StudySM released today.
The study finds that 13 percent of new-vehicle buyers considered a used vehicle during their shopping process, a 10 percent increase over the past three years. Additionally, 37 percent of new-vehicle buyers who considered a used car used the Internet during their shopping process. In contrast, only 27 percent of buyers who did not consider a used vehicle used the Internet while shopping.
Shoppers who consider a used vehicle use the Internet to search for information regarding vehicle financing, including trade-in options, and service-related aspects. In comparison, shoppers who do not consider a used vehicle use the Internet primarily to look for vehicle features and specifications.
“Automakers have been increasingly focusing on the used–car business in India, specifically with certified used cars which come with a manufacturer warranty,” said Mohit Arora, executive director at J.D.Power Asia Pacific, Singapore. “Additionally, automakers have ushered in transparency via their websites that provide real-time information on used vehicle inventory and price information. These activities assure customers of a quality product by providing detailed insights about the vehicles, thereby propelling the consideration of a used-vehicle purchase.”
Now in its 14th year, the study examines seven factors that contribute to new-vehicle buyers’ overall satisfaction with the sales experience (listed in order of importance): delivery process, delivery timing, salesperson, sales initiation, dealer facility, paperwork and deal. For the first time in 2013, the study examines sales satisfaction in two vehicle segments: luxury and mass market. The results of the luxury segment will be announced in mid-September.
Overall sales satisfaction in the mass market segment is 841 index points on a 1,000-point scale, a 21-point increase from 2012. On average, automakers post strong increases across all the factors, most notably in salesperson, paperwork and delivery timing.
The overall improvement in satisfaction is driven by a higher quality of engagement between salespersons and customers. The majority (96%) of customers indicate that their salesperson spent sufficient time in conversation focused only on them. Additionally, 61 percent of customers indicate that their salesperson demonstrated the vehicle’s features and benefits during the test drive, up from 54 percent in 2012. Further, overall delivery time for new vehicles has declined significantly to 10 days in 2013 from 12 days in 2012.
“Sharp growth in the recent past had resulted in stretching the dealers’ abilities in engaging customers effectively during the sales process,” said Arora. “Due to relatively lower showroom traffic in 2013, dealers have made efforts to ensure a higher level of engagement during the sales process. In addition, vehicle delivery turnaround time has declined significantly.”
Arora noted that all these aspects have resulted in a better shopping experience for customers.
“It would be prudent for automakers and their networks to continue this level of customer engagement, even when throughputs reach higher levels,” said Arora.
Customers who are highly satisfied with the overall purchase experience have higher levels of advocacy and loyalty toward the dealership and the vehicle brand, compared with highly dissatisfied customers. Among customers who are highly satisfied with their purchase experience at the dealership (satisfaction scores of 920 or higher), 91 percent say they “definitely will” recommend their purchase dealer to a friend or relative. These owners are also far more likely to repurchase or recommend the same brand in the future. In contrast, only 50 percent of highly dissatisfied owners (satisfaction scores of 784 or below) say they “definitely will” recommend their dealer.
Among the 13 brands ranked in the mass market segment, Honda and Maruti Suzuki rank highest (in a tie) with a score of 849. Hyundai, Mahindra and Toyota follow in the rankings, with all three brands tied at 841.
The 2013 India Sales Satisfaction Index (SSI) Study is based on responses from 8,434 new-vehicle owners who purchased their vehicle between September 2012 and April 2013, and includes evaluations of more than 71 models within the mass market category. The study was fielded from March to July 2013.