New-Vehicle Buyers in Vietnam Select Their Purchase Dealer Based on Reputation

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Honda Ranks Highest in Sales Satisfaction among Mass Market Brands in Vietnam

SINGAPORE22 October 2014 — New-vehicle buyers in Vietnam select their purchase dealer based first on the dealer’s reputation and then on the availability of the model they want, according to the J.D. Power 2014 Vietnam Sales Satisfaction Index (SSI) StudySM released today. 

The study finds that 29 percent of new-vehicle buyers in Vietnam select their dealer based on its reputation, followed by availability of the vehicle model (25%) and proximity of the dealer to their home or workplace (17%).

“As in other countries, reputation has a significant influence on the selection of a dealership among new-vehicle buyers in Vietnam,” said Loic Pean, senior manager at J.D. Power Asia Pacific. “Satisfying buyers helps build loyalty and advocacy, and positive word of mouth is essential to customer acquisition.”

Now in its sixth year, the study examines seven factors that contribute to overall new-vehicle buyer satisfaction with their purchase experience. In order of importance, they are delivery process (29%); delivery timing (17%); sales initiation (15%); paperwork (11%); salesperson (11%); dealer facility (10%); and deal (7%). SSI performance is reported as an index score based on a 1,000-point scale, with a higher score indicating higher satisfaction with the new-vehicle sales and delivery process. The 2014 study examines sales satisfaction exclusively in the mass market segment.

Overall sales satisfaction in the mass market segment in Vietnam averages 849 in 2014, down slightly from 850 in 2013. However, implementation of sales standards has improved year over year. The study identifies 19 sales standards that enhance the overall customer sales experience. On average, salespeople implemented 16.7 of the 19 standards in 2014, up from 15.6 in 2013.

There is strong demand for new vehicles in Vietnam, specifically for compact and entry midsize cars, SUVs and MPVs, with 2014 sales expected to reach 130,000.[1] Pean noted the sales growth is due in part to Vietnam’s lower registration tax policy; low interest rates on bank loans; and promotions and sales efforts by dealers, all of which make vehicles more affordable.

Price (48%) is the reason cited most often for rejecting a particular vehicle model. The study finds that 24 percent indicate they were not offered loan options, and 10 percent indicate they were only given loan options after they asked for them.

KEY FINDINGS

  • Using multiple modes—such as a test drive, video or verbal explanation—to demonstrate a vehicle’s features, advantages and benefits impacts overall satisfaction. Satisfaction among new-vehicle buyers who are provided three and four different demonstrations is 860 and 867, respectively, compared with 841 among those who are provided fewer demonstrations.
  • Seventy-eight percent of buyers in Vietnam use the Internet to search for information while shopping for their new-vehicle. Additionally, 91 percent indicate recommendations from friends/ relatives as an important information source and purchase reason.
  • Most new-vehicle buyers expect such “freebies” as extended warranty, free accessories or extended service package from their dealership. Satisfaction among buyers who receive three to five freebies is 880, compared with 830 among those who do not receive any freebies.  
  • Fewer buyers in 2014 receive uncomfortable sales pressure from their salesperson, compared with 2013 (8% vs. 12%, respectively).
  • Thirteen percent of buyers experience a problem—such as a small selection of models in stock or salespersons having difficulty answering questions—during the sales process in 2014, up from 11 percent in 2013. 
  • Sales satisfaction is 20 points higher among vehicle buyers who indicate their salesperson was their single point of contact during the sales and delivery process than among those whose salesperson turned over the delivery process to another dealer staff member.
  • Among vehicle buyers who are highly satisfied (SSI scores of 891 or higher), 46 percent say they “definitely would” recommend their dealer to friends and relatives, compared with only 25 percent among highly dissatisfied buyers (scores of 814 or lower) who say the same.

Study Rankings

Among the seven mass market brands ranked in the study, Honda ranks highest in overall sales satisfaction with a score of 857. Honda performs particularly well in the dealer facility, paperwork, salesperson, delivery timing and delivery process factors.  Toyota ranks second (855), followed by Ford and Mazda in a tie (849 each).

The 2014 Vietnam Sales Satisfaction Index (SSI) Study is based on responses from 1,173 new-vehicle owners who purchased their vehicle between October 2013 and July 2014. The study was fielded between May and July 2014 and measures new-vehicle owner satisfaction with the sales and delivery experience from authorized dealers in Vietnam.

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 

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