Car Shopping Is Less Satisfying for Trade-In Customers, J.D. Power Study Finds
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Nissan Ranks Highest among Mass Market Brands In New-Vehicle Sales Satisfaction in Taiwan for Second Consecutive Year
SINGAPORE: 31 August 2016 — The Commodity Tax Act has more consumers in Taiwan trading in their old vehicle for a new one, yet those with a trade-in are significantly less satisfied with the new-vehicle sales experience than those without a trade-in, according to the J.D. Power 2016 Taiwan Sales Satisfaction Index (SSI) StudySM mass market segment, released today.
Now in its 18th year, the study examines six factors that contribute to overall customer satisfaction with the new-vehicle purchase experience. In order of importance, they are delivery process (20%); dealership facility (20%); salesperson (19%); deal (16%); delivery timing (13%); and sales initiation (12%). Sales satisfaction performance is reported as an index score based on a 1,000-point scale, with a higher score indicating higher customer satisfaction. The study examines sales satisfaction in the mass market segment.
The Commodity Tax Act grants consumers a NT$50,000 tax deduction for trading in their old vehicle for a new one. As a result of the government’s measure, designed to stimulate the Taiwan economy, the proportion of consumers trading in a vehicle when they purchase a new one has increased to 33% in 2016 from 24% in 2015. Yet, overall satisfaction with the sales process among customers who trade in a vehicle is 748, significantly lower than the 795 among those who do not trade in a vehicle.
“Enthused by this stimulus measure, vehicle shoppers are entering dealerships feeling positive and upbeat about buying their next new car,” said Kaustav Roy, director at J.D. Power. “While shoppers are optimistic when they enter a dealership, they are often quickly discouraged by the sales experience. Dealers need to be prepared for the increase in showroom traffic and streamline their trade-in processes in order to improve customer satisfaction.”
Perceived pressure from salespeople is contributing to lower satisfaction among customers who are trading in a vehicle. The study finds that 7% of all trade-in customers say the salesperson tried to persuade them to pay a higher down payment; pay more than their original budget; and purchase car accessories they did not want.
Additionally, trade-in customers wait a median of 12 days to receive delivery of their new car, compared with 10 days for those without a trade-in vehicle. As a result, 39% of trade-in customers indicate they did not receive their vehicle on the date promised by the dealer, compared with 23% of those without a trade-in who say the same.
“Taking care of their customers, whether or not they have a trade-in vehicle, enhances satisfaction and also goes a long way toward building a strong brand image,” said Aaron Lee, country manager at J.D. Power. “Brands benefit from higher rates of loyalty and advocacy, which better positions them for future profits.”
Among highly satisfied customers (SSI scores of 880 or higher), 43% say they “definitely would” purchase the same brand of vehicle and 48% say they “definitely would” recommend the brand to family and friends. In contrast, among customers who are highly dissatisfied (SSI scores of 687 or lower), only 10% say they “definitely would” repurchase the same brand and only 25% say they “definitely would” recommend the brand to others.
Following are additional key findings of the study:
- Price of Cars in Taiwan Increases: The median price of a car in Taiwan is NT$780,000 in 2016, a 4% increase from 2015.
- Customers Demand Timely Updates on Delivery Status: Overall satisfaction is significantly higher among customers who are kept informed of their new car’s delivery status than among those who do not get any notifications (791 vs. 751, respectively).
- Percentage of First-Time Car Buyers Decreases: Less than half (42%) of all customers are first-time new-car buyers, down from 44% in 2015. Among all first-time car buyers, 47% are women, among whom satisfaction is lower than among men (781 vs. 791, respectively).
Overall sales satisfaction in the mass market segment averages 786 points in 2016. Among the 10 brands included in the segment, Nissan ranks highest in satisfaction for a second consecutive year, with a score of 797. Nissan performs particularly well in the sales initiation, dealer facility, deal, salesperson and delivery process factors. Luxgen ranks second with a score of 793, performing particularly well in delivery timing. Toyota ranks third with a score of 790.
The 2016 Taiwan SSI Study is based on responses from 2,465 new-vehicle owners in the mass market segment who purchased their vehicle between July 2015 and March 2016. The study, which was fielded from January through May 2016, measures new-vehicle owner satisfaction with the sales and delivery experiences from authorized dealers in Taiwan.
About J.D. Power in the Asia Pacific Region
J.D. Power has offices in Tokyo, Singapore, Beijing, Shanghai, Malaysia and Bangkok that conduct customer satisfaction research and provide consulting services in the automotive, information technology and finance industries in the Asia Pacific region. Together, the six 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 and its products can be accessed through the Internet at asean-oceania.jdpower.com.
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