Customers’ Priorities Shift from functionality to form, finds JD Power survey

The study finds that buyers place more emphasis on vehicle styling, both exterior and interior, when deciding on a model. Performance and reliability, technology is playing bigger roles in determining choice of vehicles. However, the importance of vehicle price and ability to obtain financing are declining though the experts are taking it with a pinch of salt.

South Korean carmaker Hyundai Motor has garnered the highest rankings in the 2019 India Sales Satisfaction Survey conducted by JD Power, a data and analytical company. Mumbai-headquartered Mahindra & Mahindra (M&M) came close second while Japanese automobile major Toyota Motor attained the third spot in the ranking.

The report saw Hyundai scoring 873 points on a 1000-point scale, Mahindra logged in with 872 and Toyota with 854 points respectively. Likewise, Tata Motors, Ford India, Volkswagen India, Maruti Suzuki India, Honda Cars India and Renault India managed with a score of 845, 844, 840, 834, 832 and 824 respectively. Further, in collective terms the overall satisfaction for the mass market segment has been  recorded at  846, an increase of 4 points from 2018.

Commenting on the survey Kaustav Roy, director and Country Head for India, JD Power said, “The Indian car buyer of today is far more discerning than ever before. With clear expectations on vehicle design and features, today’s buyer preferences are shifting from price consciousness to those that are driven by vehicle looks and content.”

Elaborating on the finer aspects of decision making at the time of purchase, the study reveals  that buyers place more emphasis (up 9 percentage points from 2018) on vehicle styling, both exterior and interior, when deciding on a model. Other aspects such as performance and reliability (both up 7 percentage points), as well as technology (up 5 percentage points), also play bigger roles in determining choice of vehicle.

On the other hand, aspects declining in importance are price of the vehicle/installments and the ability to obtain financing (both down 4 percentage points). Also, the customers with a monthly household income exceeding Rs 75,000 now account for 33 percent of all buyers in 2019—a marked increase from 18 percent in 2017. Consequently, customers are now able to cover the cost of a car with fewer months of income than before (15 months in 2019 vs. 18 months in 2017), the study continues.

However, a Pune-based industry insider skeptical of the finding says, “The liquidity was an issue for the entire automobile industry in 2019. Also, the increased vehicle prices added to the problem”.

The automobile industry has been in a slowdown mode since past around a year, witnessing massive production cuts and job cuts.

Additional key findings of the 2019 study
Prices on the rise, more so for small cars: Customers indicate that purchase price has been increasing over the past three years, with prices 5 percent higher than 2018 and 11 percent higher than 2017. This increase is most evident in the small car segment (9% higher than 2017) and relatively less so in the SUV segment (3% higher than 2017).

Fewer buyers experience sales pressure: A smaller proportion of customers indicate problems such as dealers being 'pushy' while selling the vehicle (15% in 2019 vs. 22% in 2018); attempting to change promised prices (11% vs. 17%); or difficulty getting a 'straight answer' on price (14% vs.18%).

Faster and smoother delivery: The time between booking a new vehicle to actual delivery has dropped to 10 days from 12 days in 2018. More vehicles are also being delivered without problems (92% vs. 83% in 2018) such as unwashed vehicles, scratches and dents, missing features and more.

Parameters of customer satisfaction
The study in its 20th year examines six factors that contribute to overall customer satisfaction with their new vehicle purchase experience in the mass market segment. In order of effect on overall sales satisfaction, those factors are dealership facility (22%); delivery process (21%); dealer sales consultant (21%); paperwork completion (17%); working out the deal (15%); and dealership website (3%). The study also measures new vehicle owners’ likelihood to recommend their vehicle brand on a 0-10 point-scale.

The J.D. Power 2019 India Sales Satisfaction Index (Mass Market) Study is based on responses from 6,583 new-vehicle owners who purchased their vehicle between September 2018 and June 2019. The study was fielded from March through September 2019.