Car buyers in India migrating to higher-quality brands

November 28, 2013: As per the J D Power Asia Pacific 2013 India Initial Quality Study (IQS) released today, new-vehicle buyers in India are more frequently choosing to purchase vehicles with fewer initial quality problems.

The study, which was fielded from May-September 2013 in 25 cities across India, is based on evaluations from 9,070 owners who purchased a new vehicle between November 2012 and July 2013. The study includes 74 vehicle models from 17 makes.

Honda and Toyota each have three models that rank highest in their respective segments. The top-ranking Hondas are the Brio (upper compact segment); Amaze (entry midsize); and City (midsize) while the winning Toyotas are the Innova (MUV/ MPV); Corolla Altis (premium midsize); and Fortuner (SUV).

The Hyundai Santro ranks highest for the second consecutive year in the compact car segment. Maruti Suzuki’s Alto 800 (entry compact) and Swift (premium compact) rank highest for the second consecutive year in their respective segments.

The study finds that the sales volumes of automakers that have quality above-industry-average initial quality have increased by an average of 6 percent since 2011. In contrast, automakers whose customers report more quality problems than average have experienced an 8 percent decline in sales during the same period. Moreover, the shift toward purchasing above-industry-average quality vehicles is more pronounced among experienced/repeat buyers, with 27 percent choosing higher quality vehicles during the same period.

“With quality being one of the key drivers for purchasing vehicles, automakers need to focus on achieving exceptional quality levels,” said Mohit Arora, executive director, J D Power Asia Pacific, Singapore. “Manufacturers that are able to consistently deliver a high level of quality may be able to garner much higher growth in sales, even in today’s challenging economic environment. On average, sales volume among vehicles that ranked highest in their segment in 2013 has more than doubled since 2011.”

In-depth study

The study, now in its 17th year, measures problems owners experience with their new vehicle during the first two to six months of ownership. The study examines more than 200 problem symptoms covering eight vehicle categories (listed in order of frequency of reported problems): engine and transmission; vehicle exterior; driving experience; HVAC; features, controls and displays; vehicle interior; seats; and audio, entertainment and navigation. All problems are summarised as the number of problems per 100 vehicles (PP100). Lower PP100 scores indicate a lower rate of problem incidence and therefore higher initial quality.

Overall initial quality in India averages 115 PP100 in 2013, an improvement from 120 PP100 in 2012. HVAC is the only category with a year-over-year increase in the number or reported problems.

“Given the extreme summer heat in most parts of India, the HVAC system is widely used in vehicles,” said Arora. “Therefore, an efficient and reliable system is important and focusing on reducing related problems — such as rear seat AC effectiveness—will likely go a long way in lifting owner perceptions of initial quality.”

The study finds that vehicle owner expectations regarding potential quality issues they may experience have a strong bearing on model advocacy.