S&P Chief Economist, J.D. Power Executive Offer Cautious but Positive Outlooks

Two experts from Standard & Poor’s and J.D. Power offered cautiously positive outlooks for the U.S. economy and for the U.S. auto industry to some 300 auto dealers and industry participants during the recent Western Automotive Conference, sponsored by J.D. Power and the National Automobile Dealers Association (NADA).

Beth Ann Bovino, U.S. chief economist for Standard & Poor’s, said that the U.S. is in its fourth year of recovery with an average growth rate of 2%. On a global level, she cited challenges to be faced including a slowdown in China, the remaining effects of the debt crisis in the Eurozone, and spikes in global oil prices.

In addressing current conditions in the U.S., Bovino said the Fed is focusing on creating jobs and is offering incentives for businesses to invest and hire, which will lead to higher growth. She said there has been robust demand and hiring in the private sector in spite of shocks. Continue reading ›

Satisfaction Surges if Dealers Use Mobile Devices to Enhance Sales Process

Chris Sutton

Chris Sutton

Satisfaction is highest among new-vehicle buyers who are presented with pricing/payment options on a computer screen or a tablet (833 on a 1,000-point scale) during the sales process, according to our 2013 U.S. Sales Satisfaction Index (SSI) Study, which is based on responses from 29,040 new-vehicle buyers or lessees, who completed their transaction in April or May 2013.

Using technology continues to make a major difference in enhancing the buyer’s or lessee’s sales experience at the dealership. Specifically, when a dealership salesperson uses a tablet device during the sales process with new-vehicle buyers, satisfaction is 52 points higher on average (844) than when a salesperson does not use a tablet during the sales experience (792). Satisfaction with a salesperson using a computer printout (820) receives the next highest score, followed by verbal price quotes (792); and lastly, written figures (780).

Our 2013 U.S. SSI Study finds that tablets are proving to be particularly versatile and effective tools and may help maintain consistency during the sales process, while providing accessible and dynamic product information. Yet, we also see that tablet usage among dealership salespeople remains relatively limited—only 10% of dealership salespeople use these devices. On a positive note, that’s still up from 7% in 2012. Continue reading ›

October U.S. Auto Sales Revive after U.S. Government Shutdown

Cars on LotDespite the disruption of the 16-day U.S. government shutdown (Oct. 1 – 16), new-vehicle sales climbed in the second half of the month for nearly all automakers. More than 1.205 million new vehicles were delivered in October, according to J.D. Power and its strategic partner LMC Automotive.

October total sales were up 6.4% from October 2012 on a selling-day adjusted basis (there was one more selling day in October 2013 than in October 2012*). However, deliveries were down 9.7% from September 2013. The seasonally adjusted annual selling rate (SAAR) translated to 15.2 million units—a million units stronger than last October’s 14.2 million pace, but slightly below the 15.3 million unit rate in September of this year.

Positive factors that benefited new-vehicle sales in October included declining average gas prices at the pump; continued availability of credit for financing and leasing vehicles—including low interest rates; and a slow but continuing recovery in commercial industries where trucks are needed—such as the energy and housing sectors. Continue reading ›

Super Premium Model Sales Surge 18% in First Nine Months of 2013

The ultra-luxury niche segment that J.D. Power calls super premium recorded a significant 18% increase in sales during the first nine months of 2013. Fiat-Chrysler Group’s Maserati brand sold the most units among the eight premium brands included in this market segment. Maserati sales rose to 2,261 units, up from 1,984 in the same . . . Continue Reading Super Premium Model Sales Surge 18% in First Nine Months of 2013

Service Customers in Taiwan Expect Cost Estimate and Follow-Up

Taipei, Taiwan.Overall customer satisfaction with the service experience among vehicle owners in Taiwan who visited their dealership or service center improves by 26 points from 2012, to 873 (on a 1,000-point scale), according to our 2013 Taiwan Customer Satisfaction Index (CSI) Study.*

Study findings indicate that when customers in Taiwan drop off their vehicle for service at the dealership, they expect an estimate of charges and when work is completed, they want an explanation of the charges for service.

In 2013, satisfaction improves in each of the five factors measured with a significant advance of 27 points for vehicle pickup followed by 26-point improvements in each of these three factors: service initiation, service advisor, and service facility. 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 ›

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 ›