Vietnam Dealers Improve New-Vehicle Shopper Satisfaction amid Record Sales, J.D. Power Finds
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Toyota Ranks Highest among Mass Market Brands in New-Vehicle Sales Satisfaction in Vietnam for Second Consecutive Year
SINGAPORE: 31 Oct. 2016 — Amid rapid new-vehicle sales growth in Vietnam, dealers remain focused on their customers, which is helping boost overall satisfaction with the sales process, according to the J.D. Power 2016 Vietnam Sales Satisfaction Index (SSI) Study,SM released today.
New-vehicle sales in Vietnam are expected to reach 300,000 in 2016, a 30% increase from 2015 and a new record for the country. Dealers are driving positive sales results and improving overall satisfaction, which increases to 793 on a 1,000-point scale, up from 786 in 2015.
Yet all is not perfect at the dealership. As showroom traffic surges, shoppers are increasingly indicating that the dealer facilities are not as comfortable and well-maintained as in previous years. In particular, 10% of shoppers indicate that they were not offered any refreshments during their visit, a sharp increase from 2015 when 99% of shoppers were served food and drinks. Additionally, 4% customers found the dealer restrooms unclean or not well-maintained, up from 2% last year.
Customers are also experiencing more problems in their interactions with their purchase dealer. The proportion of customers experiencing uncomfortable pressure during the shopping process—such as the pressure to buy a vehicle without the exact options desired or to put down a higher down payment—has increased to 7% in 2016 from 2% in 2015. Additionally, 21% of customers have encountered at least one problem, such as small selection of models in stock, the salesperson not being able to answer their questions or the salesperson being insincere, up from 6% in 2015.
“The Vietnam automotive industry is experiencing high growth due to the country’s economic stability and higher purchasing power by consumers, many of whom are purchasing a car for the first time,” said Mohit Arora, regional vice president at J.D. Power. “This is the time for the industry to be extremely disciplined in providing a consistent sales experience in order to position itself successfully for sustainable business expansion.”
More Customers Financing their New-Vehicle Purchases
The study finds that 21% of buyers are financing their new-vehicle purchase through loans, up from 8% in 2015 and the highest level since the study’s inception in 2009. However, customers who finance with a loan are notably less satisfied than those who pay with cash (749 vs. 805, respectively).
The primary source of dissatisfaction with the loan process lies mainly with the 58% of customers who arrange their own vehicle financing, an increase from 34% in 2015. On average, satisfaction among these customers is lower than among those whose dealer arranges the financing on their behalf (738 vs. 764, respectively). Furthermore, 10% of customers who arrange their own financing find the terms of their loan to be worse than their initial expectations, more than double the proportion in 2015.
“Vehicle financing can be a very daunting process for car buyers, especially for those who have no prior experience in purchasing a vehicle,” said Loïc Péan, senior manager at J.D. Power. “Car buyers may feel a desire to control the financing process by handling it on their own. However, dealers that can demonstrate transparency and navigate this loan process for the customer can benefit from higher levels of trust and satisfaction.”
The study finds that among highly satisfied customers (overall satisfaction scores of 865 and higher), 86% say they “definitely would” service their vehicle at their purchase dealer and 51% say they “definitely would” recommend the brand to family and friends. In contrast, among customers who are highly dissatisfied (scores of 728 and lower), only 46% say they “definitely would” service at the same dealer and only 25% say they “definitely would” recommend the brand to others.
Following are additional key findings of the study:
- Delivery Timing Increases: More than a third (37%) of buyers say they had to wait 13 days or longer to receive delivery of their new vehicle, up from 27% in 2015. Satisfaction with delivery timing decreases significantly to 762 when it takes two or more weeks to receive the vehicle, compared with 811 when the delivery takes less than two weeks.
- Shoppers Are Less Decisive: Nearly three-fourths (73%) of buyers say they had pre-decided on either their vehicle brand or exact model before beginning the shopping process, down from 88% in 2015. Additionally, 43% shoppers say they seriously considered at least one model other than the one they finally purchased, up 5 percentage points from 2015.
- Salesperson Compares Features with Competitor Models: The study finds that 75% of shoppers ask their salesperson to compare their target vehicle with competitor models, up from 61% in 2015. Among them, overall satisfaction with sales initiation averages 791 when the salesperson is able to provide a comparison with other models, and slides to 734 when the salesperson does not make comparisons.
Among the eight mass market brands ranked in the study, Toyota ranks highest in overall sales satisfaction for a second consecutive year, with a score of 813. Toyota performs particularly well across all factors. Honda and Mazda rank second in a tie, each with a score of 798.
Now in its eighth year, the study examines sales satisfaction in the mass market segment using six factors that contribute to overall customer satisfaction with the new-vehicle purchase experience (in order of importance): salesperson (21%); delivery timing (18%); dealer facility (17 %); sales initiation (17%); delivery process (14%); and deal (14%).
The 2016 Vietnam Sales Satisfaction Index (SSI) Study is based on responses from 1,655 new-vehicle owners who purchased their vehicle from September 2015 through July 2016. The study was fielded from April through July 2016.
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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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