New-vehicle buyers look for best deal

As the demand for new vehicles slows in Thailand, buyers are looking for hassle-free negotiations and comparing offers between dealers to get the best deal, according to a study by JD Powers. 

The study examines seven factors that contribute to overall customer satisfaction with their new-vehicle-purchase experience. In order of importance, they are: the delivery process; salesperson; dealer facility; sales initiation; paperwork; delivery timing; and the deal. Sales performance is reported as an index score based on a 1,000-point scale, with a higher score indicating greater satisfaction with the new-vehicle sales and delivery process. The 2014 study examines sales satisfaction exclusively in the mass-market segment. According to the JD Power Asia Pacific 2014 Thailand Sales Satisfaction Index (SSI) Study, overall satisfaction for mass-market brands averages 899 in 2014, down from 904 in 2013. The drop in satisfaction is attributed to the deal, which drops 11 points, the sales initiation (-10) and paperwork (-9). 

“Following the end of the government programme giving an excise tax refund to first-time buyers, overall demand for new vehicles contracted by as much as 40 per cent compared with 2013,” said, JD Power Asia Pacific senior manager Loic Pean. “This situation increases competition not only among nameplates, but also among dealers, as informed customers are leveraging the situation to ask for more promotions and higher trade-in value of their old vehicles. As a result, some customers are even travelling longer distances to purchase a vehicle from a dealer who offers a better deal, even though they do not plan to use that dealership after the purchase for routine maintenance services.” 

 

KEY FINDINGS 

_ Among a list of 19 sales standards, implementation of sales standards improves 0.5 points in 2014 compared with 2013. But a drop in the quality of execution of certain activities resulted in an 8-percentage-point decline in the number of “delighted” customers, those who rate their overall purchase experience 10 on a 10-point scale. 

_ New-vehicle shoppers are relying more on recommendations from other owners (40% in 2014 vs 28% in 2013) and salespeople (65% in 2014 vs 50% in 2013), and less on mass media such as TV (43%) and the Internet (33%) to help them decide which vehicle to purchase. 

_ With fewer prospective customers visiting showrooms, shoppers are receiving help from more salespeople at dealerships. As a result, fewer shoppers are feeling pressure from the dealer to purchase a vehicle (9% in 2014 vs 13% in 2013). In addition, 59 per cent of shoppers indicate it took less than one month to close the deal, compared with 35 per cent who felt the same in 2013. 

_ Despite more sale staff available to help customers, satisfaction with the sales initiation process decreases to 887 in 2014 from 897 in 2013, as more shoppers have to wait to be greeted at the dealership (+2 percentage points); fewer receive a vehicle demonstration (-9 percentage points) and more reported a test drive was not available (+7 percentage points). The study also finds a 6-percentage-point decrease in “delighted” customers who did receive a thorough follow-up from the sales staff on their inquiries. 

_ The study finds a 44-per-cent increase in the percentage of customers who negotiate the price of their vehicle in 2014, compared with 2013. Additionally, 36 per cent of customers indicate they received a discount compared with 9 per cent in 2013. 

_ A high proportion (28%) of customers say the salesperson did not follow up with them on the vehicle-delivery status after a booking was made – the day the deal is finalised and the customer pays a deposit – resulting in a drop in satisfaction in the delivery-timing factor, although the actual delivery time improved significantly (47% of vehicles are delivered within two weeks in 2014 vs 21% in 2013). 

 

STUDY RANKINGS 

Among the nine mass-market brands mentioned in the study, Toyota ranked highest in sales satisfaction for a third consecutive year, with a score of 906. Toyota performed particularly well in the sales initiation, dealer facility, deal, paperwork and delivery-timing factors. 

Isuzu ranked second at 904, and performed particularly well in the salesperson, delivery-timing and delivery-process factors. 

The 2014 Thailand SSI Study was based on responses from 2,998 new-vehicle owners who purchased their vehicle between August 2013 and March 2014. The study was conducted between February and May 2014.