Shorter Vehicle Delivery Time Impacts Dealership Selection in India

India02Although dealer proximity is still the most influential reason for choosing a dealership in India, new-vehicle buyers cite immediate delivery as an emerging key consideration, according to our 2013 India Escaped Shopper Study (ESS). More than one-sixth (16%) of customers cite immediate delivery as the most influential reason for selecting a dealer, up from just 8% in 2009.

In addition, a longer delivery time is cited by new-vehicle buyers as the second-most influential reason to reject a vehicle that shoppers had initially considered purchasing. The interest in vehicle delivery is related to the final decision process. Once the decision is made and the payment and other processes are completed, new-vehicle owners want to immediately show off their prized possession. 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 ›

Urban Shift Impacts India New-Vehicle Shopping Behavior

Mohit Arora

Mohit Arora

During the past five years, demographic differences in India and urban shifts have been creating distinctive regional shopping behaviors as well as different regional ownership experiences among new-vehicle buyers, according to our 2013 India Escaped Shopper Study (ESS).

A few of the major regional changes that J.D. Power Asia Pacific observes in the study that examines the reasons why new-vehicle shoppers consider but ultimately reject certain models in favor of another are highlighted:

• There has been a regional surge in first-time new-vehicle buyers mainly in the Eastern and Western regions of India. Nearly 70% of buyers in the Western region and 57% of buyers in the East are purchasing a new vehicle for the first time.

• In contrast, the percentage of first-time new-vehicle buyers in the Northern region has declined while the first-time buyer percentage has remained flat in the South. Continue reading ›

Luxury Brands in India Must Reinforce a Premium Image During Sales Experience

Mohit Arora

Mohit Arora

The luxury vehicle market in India has grown in recent years, with premium sales reaching 26,000 units in 2013. This number is expected to triple to 84,000 units by 2020, according to our strategic partner LMC Automotive. In addition, an increase in the number of luxury models available in India, coupled with attractive financial options that enhance affordability, has helped the luxury market to grow.

Success, however, brings with it additional challenges for premium brands. Sales growth adds pressure for luxury brands to differentiate themselves from the mass market brands. According to findings in our 2013 India Sales Satisfaction Index (SSI) Study, overall satisfaction with the sales experience in the luxury segment averages 873 points on a 1,000-point scale. Although the luxury segment average is 31 points higher than the massmarket segment average (842), this index score is not a major differentiator for these brands, based on study results.

The price of luxury vehicles is much higher than the price of mass market vehicles. We see that customers expect luxury brands to provide a truly differentiated experience to enhance the value of ownership of these vehicles. The current network of dealers does not provide the level of differentiation expected to reinforce the premium image of luxury brands among these more demanding customers. Continue reading ›

Certified Used Vehicles are More Attractive to India’s New-Vehicle Buyers

MohitArora

Mohit Arora

Some 13% of new-vehicle buyers in India considered a used vehicle during their shopping process—an increase of 10% over the past three years, according to our 2013 India Sales Satisfaction Index (SSI) Study, which evaluates sales satisfaction among 8,434 new-vehicle owners who purchased their new vehicle between September 2012 and April 2013.

Findings show that more than one-third (37%) of new-vehicle buyers who considered a used vehicle this year indicated using the Internet during their shopping process to find information about vehicle financing, trade-in options and service-related issues.

In contrast, only 27% of new-vehicle owners who only considered new vehicles used the Internet for shopping, primarily to look up vehicle features and specifications. Continue reading ›

What Dealers, OEMs Can Do to Offset Sluggish Market in India

MohitArora

Mohit Arora

A slowing economy in India is creating more pressure on the country’s auto industry. In light of dimmer economic conditions, Mohit Arora, director and country manager at J.D. Power Asia Pacific, discussed the outlook for India’s dealerships and auto sales in a column in India’s Businessworld magazine. Excerpts from the column titled “Is it All Doom and Gloom at Car Dealerships?” are highlighted in this post:

Economic Front

A slowdown in GDP growth, industrial production and a decline in the value of the rupee against the U.S. dollar have observers jittery about India’s future growth prospects. Anticipated increasing pressure on inflation from higher fuel costs also is expected to negatively impact household expenses. It’s not surprising, then, that the automotive industry is feeling the pressure, with year-over-year new-vehicle sales down in double digits as fewer consumers visit their local showroom to buy a new vehicle.

What Do Dealers Anticipate?

Recently, we asked more than 600 auto dealers in India about their business and how satisfied they were with the support they were receiving from the manufacturer. The results from the J.D. Power Asia Pacific 2013 India Dealer Satisfaction with Automotive Manufacturers Index  Study (DSWAMI) showed that one in five dealers expected to report a loss in the financial year (2012-2013), which is up from 9% in the previous year. In addition, less than one-half (44%) of dealers anticipated that they would make a profit—down from nearly two-thirds (62%) in the prior year. Continue reading ›

Lack of Routine Service Visits Impacts Vehicle Dependability in India

MArora

Mohit Arora

The overall dependability of vehicles (2.5 to 3.5 years old) in India has declined for a second consecutive year, and problems measured across all categories have increased 24% from the previous year, according to our 2013 India Vehicle Dependability Study (VDS).

In a July post on our Global Automotive Blog (GAB), Mohit Arora, executive director of J.D. Power Asia Pacific, pointed out that “an overall decline in vehicle dependability in India may be partly due to the fact that an increased number of vehicles in the country are not covered under extended warranties or service contracts.” He also said owners are not taking in their vehicles for maintenance as often as in the past. Continue reading ›

Tata Motors: Remaining Competitive in India

Ammar Photo

Ammar Master

One of India’s major automakers, Tata Motors, is struggling in its home market as buyers are attracted to the competition’s products. Tata’s upgraded products lack excitement and the Nano’s current slump has brought up a question about the company’s ability to connect with young and aspiring consumers in India.

During the past few years, more competitors have been entering the critical sub‐compact car market, and Tata may have over-emphasized the importance of its Nano and the role of the model in the company’s portfolio.

Tata was riding high on expectations of a mass migration of India’s two‐wheeler buyers to the affordably priced Nano. When this did not happen, the Nano was in a position that failed to win buyers from stronger models such as the Maruti Suzuki Alto and Hyundai i10. Continue reading ›

Maruti Suzuki, Toyota Earn Most Segment Awards in 2013 India VDS

Maruti Suzuki and Toyota each earn two awards for producing models with the fewest problems per 100 vehicles (PP100) in their respective segments, according to the J.D. Power Asia Pacific 2013 India Vehicle Dependability StudySM (VDS). Other nameplates earning segment-level model awards for vehicle dependability are: Honda, Chevrolet and Ford.

Although there are 11 . . . Continue Reading Maruti Suzuki, Toyota Earn Most Segment Awards in 2013 India VDS

Overall Vehicle Dependability in India Dips, Repair Visits Rise

Mohit Arora

Mohit Arora

For a second straight year, overall dependability of vehicles that are 30 to 42 months old in India declines, according to our 2013 India Vehicle Dependability Study (VDS), with a 24% increase in problems across all problem categories and for all models.

The study, now in its sixth year, measures problems experienced by 7,032 original owners in 25 cities who purchased a new vehicle between July 2009 and September 2010. Some 169 different problem symptoms are probed in nine problem categories* to calculate the overall vehicle dependability index.

In 2013, overall vehicle dependability in India averages 280 problems per 100 vehicles (PP100), compared with 225 PP100 in 2012, with a lower score reflecting higher long-term vehicle quality. We should note that the increase in problems this year cannot be attributed to a major increase in one or more of the areas evaluated, nor to all-new models included in the study. Continue reading ›