As shopping traffic for new vehicles has increased at showrooms in India, dealers have focused on maximizing sales conversions rather than providing a satisfying customer purchase experience, according to the J.D. Power Asia Pacific 2015 India Sales Satisfaction Index (SSI) Study released today.
Now in its 16th year, the study examines seven factors that contribute to new-vehicle owners' overall satisfaction with their sales experience (listed in order of importance): delivery process, delivery timing, salesperson, sales initiation, dealer facility, paperwork and deal. Satisfaction is calculated on a 1,000-point scale.
Overall sales satisfaction in the mass market segment is 851, a 6 point decline from 2014. Nearly one in five (18 percent) customers is dissatisfied with several critical aspects of the purchase process, including negotiations for their new vehicle, delivery commitments and the overall delivery process.
"Intense competition and pressure to maximize sales conversions has shifted focus from a customer-centric approach to a sales-driven approach for dealers, impacting customer satisfaction," said Mohit Arora, executive director, J.D. Power Asia Pacific, Singapore. "Original equipment manufacturers (OEMs) and dealerships need to provide a pressure-free environment that is conducive to sales, which can lead to a positive and lasting impression of the brand and dealerships in the minds of customers."
Study findings show that purchase reasons and shopping behavior vary significantly across demographics. A larger proportion of younger buyers (30 years and younger) place a greater emphasis on vehicle design, performance and features as purchase criteria for their vehicle, compared with all other age groups combined (43 percent vs. 35 percent, respectively). Additionally, using the internet as a source of information for vehicle purchase is higher among younger buyers than among all other age groups combined (32 percent vs. 26 percent, respectively).
- Satisfaction with the delivery process and delivery timing declines the most year over year, dropping by 9 points in each factor.
- The average time for vehicle delivery has increased to 11 days after booking in 2015 from 9 days in 2014. Shoppers expect to be shown the same model variant that they intend to purchase. Currently, non-compliance on this aspect of the purchase process is 16 percent in the market in India, resulting in a 40-point decline in overall satisfaction.
- More than one-third (39 percent) of new-vehicle owners visited showrooms at least three times during their shopping process, up by 4 percent from 2014. Satisfaction among these owners is 25 points lower than among those who visited showrooms two or fewer times.
- Among new-vehicle owners who are highly satisfied with their purchase experience (sales satisfaction scores 922 and above), 82 percent say they "definitely will" recommend their purchase dealer to family and friends and 74 percent say they "definitely will" purchase the same vehicle make in the future. Conversely, only 41 percent of highly dissatisfied owners (scores 801 and below) say they "definitely will" recommend their purchase dealer to family and friends and 37 percent say they "definitely will" repurchase the same brand.
Toyota and Mahindra rank highest, in a tie, with a score of 872 each. Toyota performs particularly well in the sales initiation factor and Mahindra performs highest in the paperwork factor.
The 2015 India Sales Satisfaction Index (SSI) Study is based on responses from more than 7,895 new-vehicle owners who purchased their vehicle between September 2014 and April 2015, and includes evaluations of more than 75 models within the mass market segment. The study was fielded from March to July 2015.