This annual study, which is now in its seventh year, was conducted by market research leader TNS Automotive. It is the largest syndicated automotive study in India, representing the responses of more than 7,500 new car buyers from 28 cities and covers over 45 different car models. Customers were asked to evaluate cars on key parameters like sales satisfaction, product quality, vehicle performance and design, aftersales service, brand image, and cost-of-ownership. These are compiled to arrive at the TCS index score for each model, which is a measure of the satisfaction and customer loyalty that particular model enjoys with its customers.

The study uses the TRI*M methodology to measure the strength of the customer’s relationship with his vehicle brand. The uniqueness of this system enables TNS to track how customer expectations have changed over the years. A quick look at the product performance and design parameter highlight such changes quite clearly. For example, mileage and engine performance have remained the drivers of satisfaction over the years. However, the look and feel of the instrument panel, which was not seen as important earlier, has also become a satisfaction driver now. Similarly, the quality of upholstery, which was unimportant in the past, has become a competitive differentiator.

Among the various facets of ownership, the cost of ownership remains a critical driver of satisfaction. Rising fuel prices have meant that high mileage remains an important need for consumers, while they also seek cars that have lower expenses on routine maintenance. High resale value also delights consumers and brands that perform well here do better in the study.

Small and relatively low-priced petrol cars have traditionally delivered high levels of satisfaction and in 2008, their scores have remained largely unchanged. However, there is a clear improvement in the scores of other cars such as premium midsize cars, entry luxury cars diesel cars and premium sport utility vehicles.

According to Pradeep Saxena, vice-president, TNS Automotive, “The small and midsize diesel car segment has shown a remarkable improvement on practically all aspects. They have done well not just because of their lower cost of ownership but even on aspects like performance and design, as well as quality.”

The improvement in the scores of small diesel cars also has a lot to do with the improvement in Tata Indica scores. Rankings for the study are done at the vehicle segment level to provide comparisons among similar groups of vehicles. Among the models that have topped their segments in 2008 are the Maruti Alto, Hyundai i10, Maruti Wagon R, Hyundai Getz, Maruti Swift diesel, Maruti Wagon R Duo, Hyundai Accent, Mahindra Renault Logan, Honda City, Skoda Octavia, Chevrolet Optra Magnum Diesel, Toyota Camry, Toyota Innova, and Honda CRV.

The industry score has increased by just one point with most of them maintaining their performance. However, Mahindra has improved its score by six points and Toyota by four points. The Hyundai i10, which entered the market in 2008, did well on performance and design, quality and brand image, while the Wagon R scores well due to its low cost of ownership.

Traditionally strong performers like the Maruti Alto continued to delight customers with extremely high satisfaction levels across all parameters. Other models like the Hyundai Accent, Swift Diesel and Honda City have also continued to perform strongly, which is a tribute to their manufacturer's ability to manage these brands using a holistic approach encompassing product quality, after sales service and brand image. However, none of these models have improved their scores over 2007.

Global car market leader Toyota also did very well in the study with its Innova and Camry models topping their respective segments, and showing an improvement on all parameters compared to their 2007 performance. The industry has also made steady progress in terms of designing good quality small diesel cars, particularly by fitting modern diesel engines. The Swift diesel with its 1.3-litre Multijet engine is a good example of this trend. This has helped give a boost to the satisfaction scores of small diesel cars. While car owners in general are quite satisfied with the services they receive at authorised dealerships, manufacturers still need to demonstrate more consistency in the implementation of their service processes. Despite growth in technology and improvement in tools, customers don’t feel that their problems are being fixed the first time itself. It remains an area in need of improvement and a big driver of service satisfaction. The root cause lies in the high turnover of trained personnel at the dealerships and the lack of training facilities while replenishing them.

Another interesting phenomenon is the increasing importance of a company’s image among prospective buyers of cars. The study shows that a large proportion of customers want the manufacturers to be model corporate citizens and they also expect that all the key stakeholders in the organisations should live up to their claim of delivering quality service to customers.

Overall, the India passenger car industry has put up a strong performance in 2008 in terms of satisfying its customers with their products and services. This is particularly creditable considering the challenges that they faced in the latter part of the year with demand for cars coming under pressure due to the credit squeeze caused by the global financial meltdown.