Initial Quality in China Sets New Benchmark; Domestics Improve Significantly

Dr. Mei Songlin

China’s domestic brands are improving their initial vehicle quality and are narrowing the gap with international brands, which is reducing the overall problem rate in China to a record low, according to the 2013 China Initial Quality Study (IQS). At the industry level, overall initial quality averages just 119 problems per 100 vehicles (PP100) in 2013, which represents the lowest number of problems since the study was introduced in 2000.

The 2013 China IQS, which examines problems experienced by new-vehicle owners within the first two to six months of ownership, evaluates two general types of problems: design-related problems, and defects and malfunctions. Some 21,181 owners of new vehicles purchased between October 2012 and June 2013 in 46 major cities were surveyed for the study. The overall initial quality score for 2013 is determined by calculating PP100, where a lower problem incidence rate indicates higher quality. Continue reading ›

A J.D. Power Perspective on Ford’s Dramatic Sales Climb in China

Tim Dunne

Tim Dunne

Although Ford is somewhat of a late bloomer in the China auto market, the Detroit-based automaker is set to outpace major Japanese competitors such as Toyota and Honda Groups in passenger-vehicle sales in the China market this year, according to media reports. The major U.S. automaker still is behind General Motors and Volkswagen Group auto sales in the China market.

A Ford official told Reuters that it is possible the company will sell more than 900,000 units in 2013—including both passenger cars and commercial vehicles—in the world’s largest auto market, mainly due to a stronger product lineup. Small SUVs, including the Ford EcoSport and Kuga, have sold well and a redesigned Focus has been on sale since last year. Continue reading ›

J.D. Power Expert Offers Insight on the Shift in the Global Automotive Industry

Tim Dunne

The global auto industry is in flux with dramatic changes and growth in emerging markets—especially in the Asia-Pacific region, according to J.D. Power’s Tim Dunne, director of global automotive industry analysis.

In a recent paper that has been published in several Standard & Poor’s publications, including CreditWeek®, Dunne discusses some of these changes and provides future forecasts and an outlook for the industry in terms of auto production, changes in technology and engineering, and the impact of these changes on the environment and the economy.

A few highlights about the Asia-Pacific market are excerpted from “The Changing Landscape of the Global Automotive Industry; A Global Shift in the Balance of Power:”

• In 2013, LMC Automotive (J.D. Power’s strategic partner) expects the Asia-Pacific region to account for 36 million light-vehicle sales, representing 43% of the world’s total. Continue reading ›

China Rolls Out New Green-Vehicle Subsidies and Awareness Campaign

China Bustle and Street TrafficChina’s urban air quality has long been a source of concern for China’s government and citizens, as the country’s relatively environmentally unregulated factories spewed harmful emissions into the air. Now that the country has become the global leader in annual light-vehicle sales—and the number of light vehicles in operation has exceeded 120 million units, more than triple the number from 2000—China’s air quality challenges are an even greater concern.

Early this year, air pollution in China’s major cities, such as Beijing, was so challenging that residents stocked up on face masks and air purifiers. This kind of smog incidence is partly behind several modest programs that China’s government administrators rolled out recently.

These include another incentive program for buying fuel-efficient vehicles and a “No Car Day” campaign to help curb increasing levels of vehicle pollution in large cities, according to news reports in The Wall Street Journal and China Global Times. Continue reading ›

Superior Website Experience in China Boosts Test Drive, Purchase Intent

Dr. Mei Songlin

Dr. Mei Songlin

When new-vehicle shoppers in China have a satisfying experience using a manufacturer’s website for research, there is a higher chance that they will take a test drive and purchase a particular brand vehicle, according to the 2013 China Brand Website Evaluation Study (BWES).

The inaugural online study measures the usefulness of automaker websites at the brand level during the new-vehicle shopping process, based on four key factors (in order of weight or importance): information and content (27%); appearance (25%); speed (24%); and navigation (23%). All scores in this study are based on a 1,000-point scale.

China New-Vehicle Buyers More Satisfied with Website Speed

Speed achieves the highest satisfaction score (730) among the four factors measured, while information and content receives the lowest score (720). We observe that new-vehicle shoppers indicate a strong need for sufficient information related to entertainment systems and fuel efficiency. Continue reading ›

Local Brands in China Rise on Intender Lists; European Brands Remain Popular

China customers online 80410767Nearly one-third (31%) of consumers in China who intend to purchase a new vehicle consider purchasing a European model, although the percentage of consumers who intend to purchase a new domestic brand vehicle has increased significantly, primarily due to the inclusion of consumers in Tier 2 and Tier 3 cities, according to the 2013 China New-Vehicle Intender Study (NVIS).

The percentage of these intenders who, in the next 12 months, would consider purchasing a Chinese domestic model has climbed to 27% this year from 20% in 2012. China’s domestic brands are especially popular among consumers in Tier 2 (28%) and Tier 3 (42%) cities. In contrast, only 16% of consumers in Tier 1 cities consider purchasing a local model in China because these consumers perceive that Chinese domestic brands do not accurately reflect their social status, the study finds. Continue reading ›

Tesla Plans to Enter China Luxury Car Market Later this Year

Tim Dunne

Tesla is building its first electric car store in Beijing, China, in spite of two major challenges: a very limited charging infrastructure and intense competition in the luxury segment from Audi, BMW and Mercedes-Benz.

The new Tesla “lifestyle store,” which is slated to open later this year, is located in an exclusive . . . Continue Reading Tesla Plans to Enter China Luxury Car Market Later this Year

Owner Expectations in China Hamper After-Sales Service Satisfaction

Mei Songlin

Dr. Mei Songlin

Overall customer satisfaction with after-sales service at authorized dealerships in China declines to 815 (on a 1,000-point scale) in 2013 from 832 in 2012, due to higher customer expectations related to the service experience, according to our 2013 China Customer Service Index (CSI) Study. Among all brands by origin, only the Korean brands improve their customer satisfaction scores in 2013.

The study examines satisfaction among 15,370 new-vehicle owners (between 12 and 24 months of ownership) who visited an authorized dealer’s service department for maintenance or repair work during the past 6 months. Typically, this period is during the vehicle warranty period. A few study highlights are summarized:

• The decline in customer satisfaction with after-sales service in China is driven mainly by a drop in satisfaction with China’s domestic brands (751), as well as with Japanese (831) and European brands (832). The foreign brands’ combined scores decline 29 and 17 points, respectively, vs. 2012. Continue reading ›

China Continues to Restrict Auto Sales to Curb Smog Levels

Tim Dunne

In order to reduce traffic congestion and pollution, China has been curbing new passenger-vehicle sales in mainly Tier I cities—Beijing, Shanghai, Guangzhou and Guiyang—by limiting the number of license plates issued and selling them to consumers through auctions and lotteries.

Recently, the China Association of Automobile Manufacturers said it hopes to . . . Continue Reading China Continues to Restrict Auto Sales to Curb Smog Levels

Chevrolet Achieves First-Half Global Sales Record

General Motors’ flagship Chevrolet brand this week said it delivered a record 2.5 million new vehicles worldwide in the first half of 2013—up a slight 1.4% vs. the same six-month period in 2012. Total deliveries for all GM brands in the first half were up nearly 4% from last year’s same period to 4.85 million units, from 4.67 million units a year ago.

2013 Chevrolet Spark

2013 Chevrolet Spark

Chevrolet sales topped 1.02 million units in the U.S. market—a 5.6% gain from last year, with a combined 25% increase in demand for the mass-market brand’s smaller models, including—Sonic, Spark, Cruze and Volt plug-in hybrid. Large truck sales also rose in double digits.

J.D. Power data from the Power Information Network® (PIN) and strategic partner LMC Automotive indicates that Chevrolet’s U.S. deliveries on a selling-day adjusted basis rose 8.7% in the first half from last year, which was slightly ahead of the industry’s 8.4% increase. The brand’s share in the U.S. market edged up to 18.17% from 18.15% a year ago. Five of Chevrolet’s models ranked among the 20 best-sellers—respectively, include: the Silverado, Cruze, Equinox, Malibu and Impala. Continue reading ›