New-Vehicle Shoppers Are Increasingly Moving Toward Digital Sources, J.D. Power Finds
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Maruti Suzuki Most Considered Brand for 13th Consecutive Year
SINGAPORE: 9 Nov. 2017 — With a greater number of shoppers relying on online sources for their vehicle research, the use of traditional sources, such as newspapers and magazines, is declining, according to the J.D. Power 2017 India Escaped Shopper StudySM (ESS), released today.
Nearly two in three (64%) shoppers use the internet when researching which vehicle they plan to purchase, up from 58% last year and an increase of 28 percentage points since 2012, when it was 36%. In 2012, 50% of all shoppers said they used newspapers and magazines while researching for their new car. This year, however, only 24% say the same.
“As online channels have now become the starting point for more car buyers, shoppers today are increasingly better informed of the alternatives available to them even before they enter a dealership,” said Shantanu Nandi Majumdar, Director at J.D. Power. “That said, dealers will continue to play a pivotal role in the shopping process. However, they will need to evolve, with support from their OEMs, to develop a stronger online presence with information that customers desire, for instance, deals/ promotions, test drive bookings, delivery time and stock level, among others.”
While shoppers continue to visit the manufacturer’s website while conducting their research, for the past three years, increasingly more are turning to social networking sites, such as Facebook and Twitter (25% in 2017 vs. 8% in 2014). Older shoppers (50 years and older) are also turning to the internet for their information needs, compared with three years ago. This year’s study finds that there is an increase of 10 percentage points from last year in the proportion of older shoppers accessing social networking sites while shopping for their vehicle (26% vs. 16%, respectively).
This year, there are fewer shoppers visiting the dealerships of multiple brands before making a purchase. Five years ago, 82% of shoppers visited at least one other brand’s dealership not including the one they purchased from. In 2017, only 59% have visited at least one other dealership. This decline in visits to physical dealerships is also observed in the decreasing proportion of vehicle buyers who visited multiple dealers of the same brand before making a purchase. In 2012, 51% of all new-vehicle buyers visited at least one other dealer of the same brand, compared with 26% in 2017.
Following are key findings of the 2017 study:
- More female shoppers connected online: Female shoppers use the internet more often than their male counterparts (66% vs. 64%, respectively). As a likely consequence, fewer women than men visit multiple brands’ dealerships (at least one other brand other than the one they purchased) while shopping for their new vehicle (49% vs. 60%, respectively).
- Willingness to spend more: Although “total price too high” remains the main reason for shoppers to reject a model, they are more willing this year to consider another vehicle, which is up to Rs. 150,000 more expensive than the one they eventually purchased. Five years ago, this price ceiling was much lower at Rs. 100,000.
- Brand most often considered by shoppers: Maruti Suzuki is the most considered brand among new-vehicle shoppers for a 13th consecutive year, with 45% of all shoppers purchasing one of its models, which is the same as last year.
- Customer retention improves: Overall customer retention this year is 40%, up slightly from 38% in 2016. Maruti Suzuki improves its customer retention rate the most year over year.
The 2017 India Escaped Shopper Study is based on responses from 7,831 buyers and 3,374 rejecters of new cars and new utility vehicles who purchased their vehicle between September 2016 and April 2017. The study, which examines the reasons new-vehicle shoppers consider but ultimately reject certain models in favor of another, was fielded from March through September 2017.
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J.D. Power has offices in Singapore, Bangkok, Kuala Lumpur, Beijing, Shanghai and Tokyo 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. J.D. Power is a portfolio company of XIO Group, a global alternative investments and private equity firm headquartered in London, and is led by its four founders: Athene Li, Joseph Pacini, Murphy Qiao and Carsten Geyer. Information regarding J.D. Power and its products can be accessed through the internet at india.jdpower.com.
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