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 ›

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 ›

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 ›

Domestic Brands Make Inroads in China New-Vehicle APEAL Study

Dr. Mei Songlin

Although international luxury brands—including Audi, BMW, Lexus and Mercedes-Benz—still achieve the highest scores in pleasing their new-vehicle owners, China’s domestic brands achieve a historic high in overall vehicle appeal, according to our 2012 China Automotive Performance, Execution and Layout (APEAL) Study, which examines how gratifying a new vehicle is to own and drive during the first two to six months of ownership.

After making major advances in initial quality this year, China’s domestic brands continue to make strides to narrow the gap with all international brands and earn an average APEAL score of 781 points (on a 1,000-point scale) with significant improvements in two major areas: audio/entertainment/navigation and seats.

It’s noteworthy that the average score for all international brands drops to 839 points from 847 in 2011, due to lower satisfaction in the vehicle exterior and storage and space categories. This drop in the average APEAL score of international brands negatively impacted the overall industry APEAL average score, which slipped 3 points to 822 points from a record high of 825 points in 2011. Continue reading ›

Initial Quality Advances in China Driven by Improvements among Domestic Brands


Dr. Mei Songlin

China’s domestic brands outpace the industry in initial quality improvements, according to our 2012 China Initial Quality Study (IQS). Remarkable advances by the domestic brands have been made in three areas: ease in shifting gears (manual transmission); fuel efficiency; and incidence of brake dust. However, none of the Chinese domestic brands rank above industry average in initial quality in 2012, which means there is still significant room for improvement.

The 2012 China IQS, which is based on evaluations from 20,639 new-vehicle buyers in 43 cities across China during the first 2 to 6 months of ownership, analyzes design-related problems as well as defects and malfunctions. An initial quality score is determined by evaluating problems reported per 100 vehicles (PP100). Fewer problems indicate higher quality.

On another encouraging note, overall initial quality across the industry in China is the best in 12 years—since the inception of the study in 2000. This year’s overall industry score is 146 PP100, down 16 PP100 from an average 162 PP100 in 2011. Much of the advance in initial quality this year has been driven by improvements among the Korean and Chinese domestic brands. Continue reading ›

Initial Quality in China Sets High Mark; Domestic Brand Quality Dips

Dr. Mei Songlin

After improving steadily during the past decade, overall new-vehicle initial quality in China set a new record this year, with an average of 6 fewer problems per 100 vehicles (PP100)* than the industry average score in 2010, according to our 2011 China Initial Quality Study (IQS), which is based on evaluations from 17,675 buyers of new vehicles in 37 major cities of China during the first 2 to 6 months of ownership.

Most of the improvement this year was driven by higher quality—42 fewer PP100 on average—in Korean brand models, although models from Japanese brands, as a whole, have the lowest incidence of problems in the China market. In contrast, the initial quality of Chinese domestic brand models slipped this year. Problem incidence rose by 8 PP100, according to the 2011 study. Some more study findings are highlighted:

• Overall initial quality at the industry level averages 162 PP100, which is the lowest problem rate since the study was first conducted in China in 2000. Continue reading ›