Buyer Satisfaction Falls in Thailand, Japan; Up in Indonesia, Philippines

With new-vehicle sales falling month after month, buyers in Thailand increasingly are playing off competing offers between dealers to get the best price, J.D. Power Asia Pacific’s annual customer-satisfaction index finds.

J.D. Power Senior Manager Loic Pean says with the end of the government program giving excise-tax refunds to first-time buyers, overall demand for new-vehicle sales has contracted as much as 40%.

“This situation increases competition not only between nameplates but also between dealers, as informed customers are leveraging the situation to ask for more promotions and higher trade-in value of their old vehicles,” Pean says in a statement.

“As a result, some customers are even traveling longer distances to purchase from a dealer offering a better deal, even though they do not plan to use that dealership after the purchase for routine maintenance services.”

The study, now in its 15th year, looks at seven factors that contribute to overall customer satisfaction with new-vehicle buying in the mass-market segment. In order of importance, they are delivery process, salesperson, dealer facility, sales initiation, paperwork, delivery timing and deal.

The study is based on responses from 2,998 new-vehicle owners who purchased their vehicle between August 2013 and March 2014.

Sales performance is reported as an index score based on a 1,000-point scale, with a higher score indicating greater satisfaction.

Overall satisfaction with mass-market brands averaged 899 in 2014, down from 904 in 2013.

J.D. Power says the drop is a result of a decline in satisfaction with the deal, which falls 11 points, the sales initiation, down 10 points, and paperwork, down nine points.

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

The study finds a 44% increase in the percentage of customers who negotiated the price of their vehicle in 2014, compared with 2013. Additionally, 36% of customers indicate they received a discount, up from 9% in 2013.

Among the nine mass-market brands in the Thai study, Toyota ranked highest in sales satisfaction for a third consecutive year, with a score of 906. Isuzu placed second at 904.

Indonesian Service Better Later in Day

Meantime, J.D. Power says the same survey conducted in Indonesia found an improvement in overall satisfaction to 767 points, up 13 points from the year before.

Satisfaction is higher among customers who visit a dealership later in the day to have their vehicle serviced than among those who take their vehicle for service early in the morning.

J.D. Power Director Rajeev Nair says because a significant proportion of Indonesian customers bring their vehicle in for service early in the day, it stretches the dealership’s resources during the morning peak period.

“When the service area is busy, everything – from parking to the amount of time it takes before being greeted by a service advisor to creating work orders to getting the vehicles into the service bay – takes longer, which contributes to lower levels of satisfaction,” Nair says.

Mitsubishi and Toyota tied at the top in after-sales service among mass-market brands, with a score of 770 each. Ford and Mazda tied for third at 769 each.

“Despite the increase in service volumes arising from increasing new-vehicle sales, nine of the 12 brands ranked in the study register improvements in satisfaction levels from 2013,” Nair says.

“This is an impressive achievement and a reflection of the efforts put in by automakers and dealerships in providing customers in Indonesia with a satisfying service experience.”

Elsewhere, overall customer satisfaction with the new-vehicle sales process in Japan fell in both the luxury- and mass-market segments.

J.D. Power says overall satisfaction with luxury brands fell 10 points to 718, while satisfaction with mass-market brands dropped 15 points to 649.

Taku Kimoto, executive director-automotive division, says the declines coincided with a rise in demand for new vehicles before an increase in the consumption tax.

“Satisfaction across nearly all brands has decreased as demand surged before the tax increase went into effect,” he says. “Dealers weren’t able to dedicate sufficient time and attention to customers, which had a negative impact on sales satisfaction.”

Lexus ranked highest among luxury brands for an eighth consecutive year with a score of 761. Mercedes-Benz followed with 718.

Mini topped the mass-market segment for a second consecutive year with a score of 706. Volkswagen ranked second (676), followed by Mitsubishi (666), Nissan (659) and Toyota (653).

In the Philippines, the survey saw the overall satisfaction with the sales process improve to 847 points from 846 in 2013.

Satisfaction with the salesperson also improved year-over-year (858 vs. 851), but 33% of owners visited a dealership other than the one from which they ultimately purchased their vehicle.

Some 74% of buyers received a discount when they purchased their vehicle and 84% said they enjoyed the negotiation process.

Toyota topped the Philippines survey with a score of 860. Ford ranked second at 855.