Increased Demand for New Vehicles before Tax Hike Causes a Drop in Sales Satisfaction in Japan
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Lexus Ranks Highest among Luxury Brands for an Eighth Consecutive Year;
MINI Ranks Highest among Mass Market Brands for a Second Consecutive Year
Tokyo: 19 August 2014 ― Overall customer satisfaction with the new-vehicle sales process in Japan declines in both the luxury and mass market segments, according to the J.D. Power Asia Pacific 2014 Japan Sales Satisfaction Index (SSI) StudySM released today.
The study, now in its 13th year, measures customer satisfaction with the sales process at automotive dealerships based on four factors that contribute to overall satisfaction (in order of importance): salesperson (34%); working out the deal (26%); facility (21%); and delivery (20%). Sales service performance is reflected in an index score based on a 1,000-point scale.
Overall satisfaction with luxury brands averages 718 in 2014, a 10-point drop year over year, while satisfaction with mass market brands is 649, down 15 points from 2013.
This study fielded during a time when demand for new vehicles increased in Japan in anticipation of the consumption tax hike that went into effect April 1, 2014.
“Satisfaction across nearly all brands has decreased as demand surged before the tax increase went into effect,” said Taku Kimoto, executive director of the automotive division at J.D. Power Asia Pacific, Tokyo. “Dealers weren’t able to dedicate sufficient time and attention to customers, which had a negative impact on sales satisfaction. New-vehicle sales are expected to increase again, and dealers need to remain focused on satisfying customers during the next surge in purchases.”
Kimoto noted that there was a sharper decline in satisfaction, particularly with working out the deal and delivery, between October 2013 and March 2014. The average delivery time between April 2013 and September 2013 decreased by 2.5 days, compared with the same time period in 2012. However, average delivery time increased by 5.4 days between October 2013 and March 2014, compared with the October 2012 to March 2013 time frame, due to purchase demand immediately before the consumption tax increase.
- In the luxury segment, year-over-year satisfaction in the facility factor drops by 21 points and by 16 points in the delivery factor. In the mass market segment, working out the deal and salesperson factor scores decrease by 19 points and 14 points, respectively, compared with 2013.
- Customer satisfaction with the sales process is higher among the luxury brands than the mass market brands in all four factors. On average, the widest gap in satisfaction scores between the two segments is in facility (86 points).
- Satisfaction among customers who only shopped at the dealer from which they purchased their vehicle averages 664, compared with 637 among customers who shopped at more than one dealership.
- The study finds a correlation between overall satisfaction and the likelihood of customers to recommend their dealer to family and friends. Among satisfied customers (satisfaction scores of 800 points or higher), 84 percent say they “probably will” or “definitely will” recommend their dealer to others. However, advocacy drops to 35 percent among customers with lower levels of satisfaction (satisfaction scores of 500 or lower).
2014 Ranking Highlights
Lexus ranks highest among luxury brands for an eighth consecutive year. Lexus achieves a score of 761 and performs particularly well in all four factors. Mercedes-Benz ranks second with a score of 718.
MINI ranks highest in the mass market segment for the second consecutive year with a score of 706. MINI performs particularly well in all four factors. Volkswagen ranks second (676), followed by Mitsubishi (666), Nissan (659) and Toyota (653).
The 2014 Japan Sales Satisfaction Index (SSI) Study measures customer satisfaction with the dealer where they purchased their new passenger vehicles. The study is based on responses from 7,297 domestic and import vehicle owners after an average of two to 12 months of ownership. The online survey was fielded from May to June 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.
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