Canadian Auto Insurance Policyholders are More Satisfied with Carriers

Lubo Li

Customer satisfaction with Canadian auto insurance companies improves this year in each of the three geographic regions evaluated, mainly due to fewer premium increases in addition to higher satisfaction with policy offerings, according to results in our 2012 Canadian Auto Insurance Study. This year’s study is based on responses from 11,620 auto insurance policyholders. Some findings from each of the regions are highlighted below:

Quebec Region

Satisfaction in the Quebec region increases by 17 points (based on a 1,000-point scale), which is the largest increase in score among all three regions from 2011. Satisfaction increases significantly in two of the five factors* that make up the overall customer satisfaction index: billing and payment (+21 points) and price (+19 points). In addition, only 11% of customers in the Quebec region say they experienced an insurer-initiated rate hike—the lowest percentage in all three regions.

La Capitale ranks highest in customer satisfaction among Quebec’s auto insurance companies with a score of 850 (on a 1,000-point scale). In fact, La Capitale receives the highest index score among carriers in all three regions this year. Continue reading ›

North American Production Posts Double-Digit Year-to-Date Increase

Through the first seven months of 2012, North American light-vehicle production volume has climbed 23% (up by nearly 1.7 million units) from the same period in 2011, mainly due to major increases in production for Honda and Toyota Groups, post-recovery from setbacks related to the March earthquake and tsunami in Japan in 2011. Honda’s . . . Continue Reading North American Production Posts Double-Digit Year-to-Date Increase

Social Media Insight: Learning Lessons from the Big Mac

Jeremy Detgen

McDonald’s Canada recently launched a very successful viral campaign consisting of several videos, according to a story in Advertising Age. One behind-the-scenes video has received over 6.9 million views on YouTube. The videos address concerns that customers have about the quality and healthiness of McDonald’s food. Customers have asked questions like “Why does it not look like it does in the picture?” These videos aim to answer basic questions in an effort to be more transparent and authentic.

Authenticity in any industry is essential when building a social media campaign. While this campaign was a great success, another campaign from McDonald’s USA attempted to promote authenticity and conversation through social media, with disastrous results. The USA campaign initiated conversations on Twitter, prompting customers to share their positive experiences. Although positive stories were the intent, numerous tweets with the campaign hashtag (#McDStories) were used to describe horrible experiences with McDonald’s.

Up and Down Lessons from a Fast Food Giant

So how can the auto industry learn from a fast food company? The most obvious lesson learned from this case study is that social media has great potential, but also presents a risk of losing control over what consumers might say. The Ad Age article Why McDonald’s Canada Social-Media Success Worked for the U.S. suggests that the Canadian campaign did not give people a chance to “trash” it by disabling comments on YouTube, whereas on Twitter, the conversation was completely open. It is valuable to allow comments, but a brand must understand that there may be some criticism and controversy. The key is to manage the conversation, not control it. Continue reading ›

Brazil Vehicle Ownership Satisfaction Rises Despite Impact of Higher Ownership Costs

Jon Sederstrom

Overall satisfaction among new-vehicle owners in Brazil, which is the world’s fifth-largest country in population and geographic size, improves by 8 points from last year to an average index score of 751 (on a 1,000-point scale), according to our 2012 Brazil Vehicle Ownership Satisfaction Study (VOSS).

The increase in overall owner satisfaction in Brazil could be partly due to the entrance of more brands in the market in addition to more model choices than ever before. At the brand level, it was the second straight year that Toyota is the highest-ranking brand in the study. Toyota is followed in the rankings by two new entrants: South Korea’s Hyundai and Kia brands. Continue reading ›

Shoppers Consume Information on OEM Websites with Multiple Devices

Arianne Walker

In the past 6 months, there has been a major shift in the way new-vehicle shoppers are consuming information found on the Internet, according to results in Wave 2 of our semi-annual 2012 Manufacturer Website Evaluation Study (MWES). We find that a higher percentage of new-vehicle shoppers now own tablets compared with January when Wave 1 of the 2012 study was released (35% vs. 20%, respectively).

In Wave 2 of the study, we see that more automakers are trying to meet the needs of tablet shoppers in addition to traditional desktop PC shoppers, often with one website. Since more than one-third of shoppers are using tablets, their expectations continue to change, which makes it increasingly important for OEMs to incorporate specific navigational elements to help these shoppers use their websites, regardless of the type of device being used.

Many automaker-sponsored websites have introduced content in a layout that places information below the illusory fold on the screen, so that visitors must scroll more to get that content. While this way of displaying information is acceptable to tablet users, it can be frustrating for desktop users. Continue reading ›

Cost of Vehicle Ownership in Brazil Has Greatest Impact on Satisfaction

Jon Osborn

New-vehicle owners in Brazil, which is the world’s fifth-largest country in terms of population and geographic area—spend a disproportionate amount of their personal income on their vehicles, compared to new-vehicle owners in other countries. Vehicle owners in Brazil pay much higher prices to purchase their new vehicle—often twice as much as US owners pay—due in part to taxes. Owners in Brazil also spend more to finance their new vehicles. A typical new-vehicle loan can have interest rates as high as 15% per year. Finally, in addition to the costs of purchasing a vehicle, new-vehicle owners in Brazil are concerned about the costs of ownership—which include maintenance and repair, insurance and fuel costs. In fact, according to J.D. Power research, these owners place more importance on the cost of owning a new vehicle than do new-vehicle owners in many other countries.

Each year J.D. Power conducts its Brazil Vehicle Ownership Satisfaction Study (VOSS) on an annual basis to measure new-vehicle owner satisfaction after 2 years of ownership in four factors: Vehicle Quality, Vehicle Appeal, Dealer Service Experience, and Cost of Ownership. And, according to our analysis, Cost of Ownership accounts for 31% of the overall satisfaction index and is the most important of the four key factors in the Brazil VOSS.

Among the other countries where J.D. Power has published VOSS—Canada, France, Germany, Italy, Mexico, and New Zealand—Italy is the only other market where cost of ownership has a similarly high importance weight (32%) in determining overall vehicle ownership satisfaction. In contrast, Cost of Ownership accounts for just 23% of the overall satisfaction index weight in measuring vehicle owner satisfaction in Mexico and only 24% in Canada. Continue reading ›

Dealer Satisfaction with Bank Financing in Canada Rises Considerably

Lubo Li

Since Canada’s market has become more competitive, Canada’s auto dealers are using multiple lenders. This year, dealer satisfaction with banks, in particular, has risen a significant 25 points from an average index score of 847 in 2011 to 872 (on a 1,000-point scale), while financing satisfaction with automaker captive finance arms is up only 7 points to 840, according to our 2012 Canadian Dealer Financing Satisfaction Study.

Along with this higher level of dealer satisfaction with banks as lenders, we find that the volume of financing business that Canada’s dealers are conducting with banks has risen to 60.5%, which is up 4.7% from 2011, while the captive market share has slipped 1.5% to 36.3% from 2011, based on retail transaction data from our Power Information Network® (PIN).

A major reason for the increase in financing satisfaction with banks among dealers is that these providers are continuously improving their offerings and improving the dealer lending experience, which puts competitive pressure on all automotive lenders to focus on providing outstanding service to dealers in order to maintain or grow their share of the business. Speed in processing a loan or lease application is crucial for dealers and this is just one area where banks more frequently are able to provide funding in 24 hours or less in comparison to captive providers—84% vs. 56%, respectively. Continue reading ›

Integrating Smartphone Apps Can Attract Canadian Auto Shoppers

J.D. Ney

Nearly two-thirds of new-vehicle shoppers in Canada (65%) indicate they own smartphones, which is up from 58% in 2011, according to our 2012 Canadian Manufacturer Website Evaluation Study.

In addition, the study finds that although slightly more male shoppers said they own smartphones than did female shoppers, both groups say they . . . Continue Reading Integrating Smartphone Apps Can Attract Canadian Auto Shoppers

Satisfying Website Visits Lead to More Showroom Traffic in Canada

J.D. Ney

A majority (76%) of new-vehicle shoppers in Canada who indicate having a highly satisfying experience while visiting an auto manufacturer’s website (score of at least 976 on a 1,000-point scale) say they are much more likely to visit that brand’s showroom for a test drive, according to our 2012 Canadian Manufacturer Website Evaluation Study.

 
As might be anticipated, among shoppers who have a less satisfying online experience (score of 500 points or below), only 14% say they will visit a dealership for a test drive. These study results indicate that there is a strong correlation between a satisfying online shopping experience leading to a visit to a dealer showroom and the likelihood of a vehicle purchase.

It’s encouraging this year that auto brands and their websites made significant advances in satisfying new-vehicle shoppers in Canada. The industry average rises 37 points to 821 from 784 in 2011, with increases across all four factors examined. Scores for Site speed and Appearance factors increased the most, based on analysis from some 3,078 new-vehicle shoppers who indicate they will be in the market for a new vehicle within the next 12 months. Continue reading ›

Automotive Landscape for OEMs, Dealers Remains a Little Bumpy but Bright

2012 International Automotive Roundtable Panel with Moderator Mike Jackson (right), AutoNation CEO and Chairman

Sales and marketing officials from General Motors Co., Fiat-Chrysler and Hyundai Groups joined NADA’s 2011 chairman and presented their viewpoints of important issues and answered questions during a panel discussion at the 2012 J.D. Power International Automotive Roundtable earlier this month.

The following three posts include excerpts from a Q&A session about dealer allocation, fleet sales, leasing and more led by panel moderator Mike Jackson, chairman and CEO of AutoNation, the largest public automotive retailer in the United States.

Panel Members:

Alan Batey —Vice President, Chevrolet Sales and Service, General Motors Company

Reid A. Bigland —President & CEO, Dodge Car Brand & Head of U.S. Sales/President and CEO, Chrysler Canada, Chrysler Group LLC

Stephen W. Wade —President, Stephen Wade Auto Center and 2011 Chairman, National Automobile Dealers Association (NADA)

Dave Zuchowski —Executive Vice President, National Sales, Hyundai Motor America

 Product Allocation Needs to Be as Equitable as Possible

Q: Mike Jackson: Does the panel believe that the manufacturer should limit the number of cars a single franchise can receive—a cap on quantity in any given market?

Dave: We look at it a different way because of our shortages. We’ve had dealers ask: Shouldn’t there be a minimum stocking effort so we have critical mass to represent the line? That’s something we are looking at. In terms of capping dealer availability, it works against the turn system. Continue reading ›