SINGAPORE: 30 SEPTEMBER 2014 — With income levels rising and more vehicles being purchased through car loans, first-time new-vehicle buyers in India are considering more vehicles during the shopping process, according to the J.D. Power Asia Pacific 2014 India Escaped Shopper StudySM (ESS) released today.
The study, which examines the reasons why new-vehicle shoppers consider but ultimately reject certain models in favor of another, finds that 27 percent of first-time new-vehicle buyers in India seriously considered a model other than the one they purchased while shopping in 2014, up from 20 percent in 2012. One of the key aspects driving the increase in cross-shopping is the proportion of first-time new-vehicle buyers who finance their purchase through a car loan. Nearly three-fourths (73%) of first-time buyers finance their vehicle in 2014, up from 64 percent in 2012.
The study finds that buyers who finance their vehicle tend to cross-shop more than those who do not opt for financing. Thirty percent of buyers who finance their vehicle also consider other vehicles, while only 25 percent of those who pay cash for their vehicle cross-shop. Furthermore, 35 percent first-time vehicle buyers have a monthly household income of INR 50,000 or more in 2014, up from 18 percent in 2012, which enhances their credit worthiness and enables them to qualify for a higher loan amount.
“While inflation rates have gone up in India, a rise in income levels coupled with greater availability of credit has given first-time car buyers the opportunity to evaluate alternative vehicles across segments and price bands,” said Mohit Arora, executive director at J.D. Power Asia Pacific, Singapore. “This is vital for automakers in India to consider as they try to increase their market share. Introduction of new body types across the various price levels will likely add more vehicle choices for first-time buyers, who account for nearly half of new-vehicle sales in the country.”
- New-vehicle shoppers are increasingly placing greater importance on a vehicle’s interior in their selection process. Among shoppers, 15 percent indicate the vehicle interior is the primary reason they rejected a vehicle in 2014, an increase from 4 percent in 2012. Issues such as interior styling, driver’s seat and rear-seat comfort are among the top interior-related reasons cited for rejecting a vehicle.
- Car buyers in India are spending more time researching their vehicle, as 35 percent indicate they researched the vehicle they purchased before visiting the dealership in 2014, up from 26 percent in 2012. Among buyers of newly launched models, 45 percent indicate they researched their vehicle in 2014, compared with only 24 percent in 2012.
- Overall customer retention drops to 38 percent in 2014, down from 40 percent in 2013. Ford, Honda and Hyundai have improved their customer retention rates the most year over year.
- Maruti Suzuki is the most considered nameplate among new-vehicle shoppers for the 10th consecutive year, with 41 percent of all shoppers eventually purchasing one of its models. New-vehicle buyers who purchase Volkswagen, Ford and Renault models shop the most before purchasing their vehicle, while buyers of Mahindra, Maruti Suzuki, Tata and Toyota models shop the least often before purchasing.
The 2014 India Escaped Shopper Study is based on the responses from 8,499 buyers and 3,448 rejecters of new cars and new utility vehicles who purchased their vehicle between September 2013 and April 2014. The study, which examines the reasons why new-vehicle shoppers consider but ultimately reject certain models in favor of another, was fielded from March through July 2014.
About J.D. Power Asia Pacific
J.D. Power Asia Pacific has offices in Tokyo, Singapore, Beijing, Shanghai and Bangkok that conduct customer satisfaction research and provide consulting services in the automotive, information technology and finance industries. Together, the five offices bring the language of customer satisfaction to consumers and businesses in Australia, China, India, Indonesia, Japan, Malaysia, Philippines, Taiwan, Thailand and Vietnam. Information regarding J.D. Power Asia Pacific and its products can be accessed through the Internet at japan.jdpower.com.
About McGraw Hill Financial www.mhfi.com
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power. www.jdpower.com
Follow us on Twitter @jdpower