Dealer Follow-Up for Feedback Can Raise Service Satisfaction in Taiwan

Follow-up contact to customers after service visits at dealerships in Taiwan can have a strong positive impact on customer satisfaction, according to our 2011 Taiwan Customer Service Index (CSI) Study, which measures satisfaction among new-vehicle buyers or lessees in Taiwan who visited their authorized dealership service center for maintenance or repair work during the first 12 to 24 months of ownership.

The study, which is based on responses from 2,795 new-vehicle owners who took their new vehicle to an authorized service center between September 2010 and June 2011, finds that satisfaction averages 35 points higher among customers who were contacted by the dealership after a vehicle service visit and asked for feedback on their experience, than among customers who report no contact from the dealership after a service visit.

Post-service contact is a critical component of the entire service experience, and can help dealerships discover any issues or problems customers may still be experiencing with their vehicle. Following up, whether through a phone call, letter, or SMS text, is also an opportunity to collect customer feedback for improvement initiatives at dealerships. Continue reading ›

Risks Apparent as China Remains Preoccupied with Size and Speed


Marvin Zhu

China’s government has earmarked a previously unimaginable 2 trillion yuan (about $300 billion) to build the world’s largest national high-speed railway network. So far, only about half of the total planned route distance of 25,000 kilometers (16,000 miles) has been completed. One of the most recent additions to China’s high-speed railway marvel is an express train between Beijing and Shanghai, which opened in June 2011, some two years ahead of schedule.

China’s ambitious “great leap forward” in industrialization and modernization has been understandably making headlines around the globe. However, these glowing platitudes abruptly turned somber on July 23, 2011, when one of the celebrated Beijing-Shanghai high-speed railroad trains crashed, killing 40 people and injuring some 200 others.

While bad weather and a subsequent system failure were found to be the main causes of the crash, some people speculate that the haste with which the railway was built—driven by thought of generating fast profits and political goodwill—should not be overlooked as a mitigating factor. China has been operating for some time on a progressively “build bigger, go faster” agenda, one where safety and reliability are not always given top priority.

Automotive Industry Caught in Bigger, Faster Tailwind

For more than a decade now, the “build bigger, go faster” mantra has prevailed in China’s automotive industry as well. Ever since China supplanted the US as the world’s largest automotive market in 2009, industry players have been in a fierce race to expand. Over the past two years alone, trillions of yuan have been invested in the car-making business, as automakers race to ramp up production. This frenzied expansion is expected to raise China’s vehicle production capacity to 31 million units by 2013, nearly doubling total sales recorded in 2010. Continue reading ›

Lower Interest Rates Prevail, Trade-Ins on the Rise

Grace Hamulic

A majority of new-vehicle buyers or lessees (77.5%) received APRs on their purchase or lease deals below 5% in July this year, much higher than in the same month a year ago (71%). In addition, the average APRs were 4.30% for financed transactions and 2.68% for lease deals, slightly lower than the average 4.48% (finance) and 3.02% (lease) APRs in July 2010, based on our Power Information Network® (PIN) retail transaction data. In the first two weeks of August, 77.6% of buyers and lessees received APRs that still averaged below year-ago rates (4.35% for financed deals and 2.70% for lease transactions).

Additionally, more than one-half of all transactions in July this year included a trade-in (52.6%), which was up 4.4 percentage points from the same month last year, when only 48.2% of all deals included a trade. More than half of all deals in the first part of August this year have included a trade-in (51.6%).

Which models are most (or least) likely to have a trade- in? In July 2011, the model with the lowest trade-in percentage (only 12.2%) was the eco-friendly Nissan Leaf battery-electric vehicle (BEV), which suggests that buyers are likely purchasing it as a second (or even third) vehicle. On the flip side, another Nissan model and a Chevrolet model tie for the highest rate of trade-ins. Among models purchased or leased in July 2011, 76.1% of Nissan Titan and Chevrolet Avalanche deals included a trade-in. Continue reading ›

Ford and Toyota Hybrid System to Boost High-Volume Truck Fuel Economy

Mike Omotoso

This week, Ford and Toyota announced that they will work together to develop a hybrid powertrain system for rear-wheel-drive (RWD) light trucks (pickups) and SUVs that is slated to be ready later in the decade. A goal is to increase fuel efficiency and to meet higher CAFE rules. The two automakers say that collaborating on the project will help both companies create fuel-efficient hybrid systems faster and at lower cost.

Both Ford and Toyota have something to offer in the venture. Toyota brings over a decade of experience in hybrid research and development. The Japanese automaker has been selling the Toyota Prius since 1997 in Japan (since 2000 in the US), and currently installs hybrid systems in RWD vehicles such as the Lexus GS 450h and the LS 600h L. However, the automaker also needs to develop a more powerful hybrid system to remain competitive with its Toyota brand RWD pickup trucks and SUVs and Lexus SUVs

Partner Ford is moving away from NiMH (nickel-metal-hydride) batteries and toward Li-ion (lithium ion) batteries, and has developed the Ford Fusion and Lincoln MKZ hybrids to have better fuel economy than the Toyota Camry hybrid. Ford also has the best-selling large pickup truck in America with the F-Series, so they can bring their expertise in pickups to the table as well. Continue reading ›

Opel to Launch Upmarket Model to Boost Brand’s Sales in Europe

Jonathon Poskitt

Recently, non-premium brand Opel/Vauxhall announced that it would introduce an “upmarket” city car to the European market, according to Automotive News. The new model, code-named “Junior,” will target consumers “who care about the status of their car, what it can do, what features it has, what telematics it has,” according to Nick Reilly, GM Europe* president.

Non-premium brands like Opel will always look to improve their market position, because if they can achieve this, it clearly benefits profitability. However, the intent to reposition a brand and the execution of it are two different things.

Opel Launches Junior in a Segment with Some Aging Products

The benefit for Opel in launching this new Basic segment car is that the segment, having seen much new model activity over the last 5 or 6 years, has seen this activity die down more recently. Many models in the segment have seen their market share suffer to some degree from model aging, which plays into the hands of Opel’s new Junior when it is launched. Continue reading ›

Light-Vehicle Production in Mexico Climbs the Most

Production in Mexico is showing the strongest year-over-year change—climbing 16% from last year with the addition of the Fiat 500, Ford Fiesta and new Volkswagen Jetta models—among the three countries in the North America region.

The United States follows Mexico with an 8% increase from last year, while output in Canada is off 1% due to production losses from Honda and Toyota. Through the first seven months of 2011, combined light-vehicle output in North America (including all three countries mentioned) is up 8% from the same period of 2010. Continue reading ›

Retail Sales Edge Up in August, but Hampered by Uncertainty

The retail sales selling rate in August is expected to be slightly stronger than in July, even though sales volume remains essentially flat, based on our analysis of Power Information Network® (PIN) retail transaction data for the current month.*

Jeff Schuster

This month’s retail sales are expected to rise 6%, to 898,000 units from 816,637 units in August 2010 on a selling-day-adjusted basis.** That translates to a 9.9 million-unit seasonally adjusted selling rate (SAAR), up from 9.5 million units in July, and more than 1 million units stronger than in August 2010 when retail deliveries represented an 8.4 million-unit SAAR.

However, without a significant increase in incentive levels or a reversal of the country’s economic challenges, there is no compelling reason for consumers who are sitting on the fence to return to dealer showrooms and purchase a vehicle. At the same time, there is little question that there is strong pent-up demand, but economic and financial uncertainty is keeping it from being unleashed. Continue reading ›

Sales Satisfaction in China Reaches 12-Year High

Dr. Mei Songlin

New-vehicle sales satisfaction in China achieves a 12-year high in 2011, and improves by 24 points compared with 2010—to an industry average 847 points (on a 1,000-point scale), according to the 2011 China Sales Satisfaction Index (SSI) Study. The study is based on responses from nearly 11,500 new-vehicle owners in 37 of China’s major cities who purchased their vehicle between August 2010 and March 2011.

Sales satisfaction in China during the first six months of ownership in 2011 has risen from last year’s levels in all seven factors evaluated, with the greatest improvements occurring in the following three measures: the deal; delivery timing; and paperwork. The deal and paperwork factors each account for 12% of the satisfaction index, and delivery timing contributes 15% to the overall index.

While German premium brand Audi ranks highest in overall sales satisfaction with a score of 887, the four nameplates that round out the top five in overall satisfaction are non-premium nameplates. In rank order, they are: Dongfeng Nissan (880); FAW-Volkswagen (869); while Dongfeng Honda and GAC Toyota tie for fifth place (866 each). Some 57 brands were included in this year’s China SSI study. Continue reading ›

Adding Hybrids to China’s Green Vehicle Plans

Tim Dunne

As China continues its quest to become the world’s leader in electric vehicle (EV) development and sales, cold hard reality may finally be starting to enter into the country’s policy decision-making on alternative vehicles.

According to Automotive News China, the Chinese government is considering adding hybrid electric vehicles and fuel cell vehicles to its list of “green vehicles” that are eligible for government subsidies. Currently, only pure-electric vehicles and extended-range electric vehicles receive incentives for vehicle development and sales.

If the reported shift toward adding hybrids is accurate, it is the right move, for several reasons.

Global sales of hybrid vehicles in 2011 are expected to reach 1.2 million units, compared to global EV sales of less than 40,000 units. The reason for the disparity is clear: While hybrid vehicle technology has been tried and proven over the last 10-15 years, the viability of EV technology is still in question. Continue reading ›

Chevrolet Volt, Nissan Leaf Buyer Profiles Differ Slightly

Mike Murray

During the first 6 months of 2011, buyers or lessees of the new Chevrolet Volt plug-in hybrid electric vehicle (PHEV) tended to be slightly older and more often male than buyers of the Nissan Leaf battery-electric vehicle (BEV), based on Power Information Network® (PIN) retail transaction data from J.D. Power and Associates. Both models launched in the US market in December 2010.

PIN data indicates that in the first half of 2011, nearly one-fourth (24.3%) of Nissan Leaf transactions were by females, while only 17.4% of Volt transactions were by female buyers—a significant difference of 8.9 percentage points. In addition, the average buyer age for the Leaf was slightly younger—the average customer was 51 years old compared with 52 years of age for Volt buyers or lessees. Continue reading ›