As New-Vehicle Sales Decline, Buyers in Thailand Demand Better Deals, Raising Competition between Authorized Dealers
Share This Page
Toyota Ranks Highest in Sales Satisfaction Among Mass Market Brands in Thailand for a Third Consecutive Year
BANGKOK: EMBARGOED FOR RELEASE UNTIL 29 August 2014 — As demand for new vehicles decreases in Thailand, new-vehicle buyers are looking for hassle-free negotiations and comparing offers between dealers in order to get the best deal, according to the J.D. Power Asia Pacific 2014 Thailand Sales Satisfaction Index (SSI) StudySM released today.
Now in its 15th year, the study examines seven factors that contribute to overall customer satisfaction with their new-vehicle purchase experience (in order of importance): delivery process; salesperson; dealer facility; sales initiation; paperwork; delivery timing; and deal. Sales performance is reported as an index score based on a 1,000-point scale, with a higher score indicating greater satisfaction with the new-vehicle sales and delivery process. The 2014 study examines sales satisfaction exclusively in the mass market segment.
Overall satisfaction for mass market brands averages 899 in 2014, down from 904 in 2013. The drop in satisfaction is attributed to the deal, which drops 11 points, the sales initiation (-10) and paperwork (-9) factors.
“Following the end of the government program giving excise tax refund to first-time buyers, overall demand for new-vehicle sales has contracted by as much as 40 percent, compared with 2013,” said Loic Pean, senior manager at J.D. Power Asia Pacific. “This situation increases competition not only between nameplates, but also between dealers as informed customers are leveraging the situation to ask for more promotions and higher trade-in value of their old vehicles. As a result, some customers are even traveling longer distances to purchase from a dealer offering a better deal, even though they do not plan to use that dealership after the purchase for routine maintenance services.”
- Among a list of 19 sales standards, implementation of sales standards improves 0.5 points in 2014 compared with 2013. But a drop in the quality of execution of certain activities results in a 8 percentage point decline in the number of “delighted” customers, those who rate their overall purchase experience 10 on a 10-point scale.
- New-vehicle shoppers are relying more on recommendations from other owners (40% in 2014 vs. 28% in 2013) and salespeople (65% in 2014 vs. 50% in 2013), and less on mass media such as TV (43%) and the Internet (33%) to help them decide which vehicle to purchase.
- With fewer prospective customers visiting showrooms, shoppers are finding more salespeople available at the dealership to help. As a result, fewer shoppers are feeling pressure from the dealer to purchase a vehicle (9% in 2014 vs. 13% in 2013). In addition, 59 percent of shoppers indicate it took less than one month to close the deal, compared with 35 percent who indicated the same in 2013.
- Despite more sale staff available to help customers, satisfaction with the sales initiation process decreases to 887 in 2014 from 897 in 2013, as more shoppers have to wait to be greeted at the dealership (+2 percentage points); fewer receive a physical product demonstration (-9 percentage points), more reported test drive was not available (+7 percentage points). The study also finds a 6 percentage points decrease in “delighted” customers who received a thorough follow-up from the sales staff on their inquiries.
- The study finds a 44 percent increase in the percentage of customers who negotiate the price of their vehicle in 2014, compared with 2013. Additionally, 36 percent of customers indicate they received a discount, compared with 9 percent in 2013.
- A high proportion (28%) of customers say the salesperson did not follow up with them on the vehicle delivery status after booking—the day the deal is finalized and the customer pays the deposit to secure the new-vehicle purchase—resulting in a drop in satisfaction in the delivery timing factor, although the actual delivery time improves significantly (47% of vehicles are delivered within two weeks in 2014 vs. 21% in 2013).
Among the nine mass market brands ranked in the study, Toyota ranks highest in sales satisfaction for a third consecutive year, with a score of 906. Toyota performs particularly well in the sales initiation, dealer facility, deal, paperwork and delivery timing factors. Isuzu ranks second at 904, and performs particularly well in the salesperson, delivery timing and delivery process factors.
The 2014 Thailand SSI Study is based on responses from 2,998 new-vehicle owners who purchased their vehicle between August 2013 and March 2014. The study was fielded between February and May 2014.
About J.D. Power Asia Pacific: www.jdpower.com
About J.D. Power and Advertising/Promotional Rules www.jdpower.com/corporate
About McGraw Hill Financial www.mhfi.com