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2013 India Sales Satisfaction Index Study Results

2013 India Sales Satisfaction Index Study Results

By Jeff Youngs,
The luxury vehicle market in India has grown dramatically in recent years, with sales expected to reach 26,000 units in 2013 and increase to 84,000 units by 2020, according to LMC Automotive, J.D. Power's auto forecasting partner. However, the just-published J.D. Power Asia Pacific 2013 India Sales Satisfaction Index (SSI) StudySM finds that luxury automakers may not be doing enough to provide a distinctly different sales experience from what's offered by mass market automakers.

The study, based on responses from 253 new-vehicle owners who purchased their vehicle between September 2012 and April 2013, and fielded from March to July 2013, is the first of its kind to differentiate between the luxury and the mass market sales experience in India. It examines seven factors that contribute to new-vehicle buyers' overall satisfaction with their sales experience (listed in order of importance): delivery process; delivery timing; salesperson; sales initiation; dealer facility; paperwork; and deal.

Overall sales satisfaction in the luxury segment averages 873 (on a 1,000-point scale)-- 32 points higher than the mass market average. However, satisfaction among luxury vehicle buyers who say that their overall sales experience "met their expectations" is not significantly different from that of mass market buyers (842 vs. 834, respectively).

"An increase in the number of luxury models available in India, coupled with attractive financial options that enhance affordability, have really helped the luxury market grow," said Mohit Arora, executive director at J.D. Power Asia Pacific. "With that growth comes added pressure for the luxury brands to differentiate themselves from the mass market brands.

"The price of luxury vehicles is significantly higher than the price of mass market vehicles, and customers expect luxury brands to provide a truly differentiated experience to enhance the value of ownership of these vehicles. The current network does not provide enough differentiation from the mass market brands to be able to reinforce the premium image of luxury brands."

The study examines a list of 18 standard sales processes, all of which vehicle buyers expect to be implemented in a satisfactory sales experience. In the mass market vehicle category, the study shows that only 15 processes must be implemented for a satisfactory sales experience to result.

The study also finds key differences in new-vehicle shopping behavior between the luxury and mass market segments. Key drivers of luxury vehicle purchases are overall vehicle performance and safety, while drivers of mass market vehicle purchases focus more on brand reputation and reliability. Also, luxury vehicle buyers are more likely to use the Internet during their shopping process, with 34% going online to search for vehicle features and specifications, compared with 28% of mass market vehicle buyers. More than two-thirds (68%) of luxury buyers have two or more vehicles in their household. Additionally, 93% of luxury vehicle buyers opt to finance their purchase, compared with 72% of mass market vehicle buyers.

"With customers paying much more for a luxury vehicle, they likely have higher expectations during the sales process," said Arora. "Even when their expectations are being met, it is surprising that their satisfaction is not significantly higher than mass market vehicle buyers' satisfaction.

"Purchasing a luxury vehicle is an expression of achieving the pinnacle of social progress in India," said Arora. "With more than two-thirds of luxury vehicle buyers having previous buying experiences with other vehicles, automakers need to personalize the entire purchase experience based on individual buyer expectations in order to truly delight these new-vehicle shoppers."

Among vehicle owners whom J.D. Power designates as "highly satisfied" with their overall purchase experience (overall satisfaction scores of 965 and higher), 99% say they "definitely will" recommend their purchase dealer to a friend or relative and 94% indicate they are likely to repurchase the same brand in the future. But among vehicle owners with overall satisfaction scores of 803 and below, only 54% say they "definitely will" recommend their dealer, and 52% indicate they are likely to repurchase the same brand in the future.

Consumer Tips
Based on the study, J.D. Power offers the following consumer tips for a satisfying sales experience:
  • Ask your friends and family for advice on individual salespeople. They can advise you as to which salespeople are the most honest and helpful, and which ones to avoid.
  • Visit dealerships at times when traffic is likely to be light. That way, your test drive will be easier to arrange, and you'll probably be able to drive the vehicle in a greater variety of situations.

Additional Research:

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