Local Firms Get Better at Selling Cars

Audi Offers the Best Car Sales Experience, but Three Chinese Firms Made the Top Ten List This Year

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SHANGHAI (AdAgeChina.com) – China's domestic car makers have not only improved their ability to make good cars, they are getting better at selling them too, according to J.D. Power and Associates.

In the research company's 2010 China Sales Satisfaction Index, three domestic brands rank among the top 10 brands this year, up from only one last year. J.D. Power measured consumer satisfaction with the sales experience of 53 brands in 2010. The industry's average score was 823, virtually unchanged from a year earlier.

The study, now in its 11th year in China, measures seven factors: delivery; timing of the delivery; dealership facilities; the salesperson; paperwork; the deal; and the initial sales contact. The survey asks car buyers to evaluate the first two to six months of ownership. This year, the study drew 10,661 responses from consumers in 33 major cities who purchased vehicles between August 2009 and March 2010.

Hafei, made by small-car and minivan maker Hafei Automobile Co., ranked fifth with a score of 841. Roewe, a brand owned by Shanghai Automotive Industry Group Corp., tied for seventh place with Buick, each with a score of 836. The minivan-manufacturing unit of China FAW Group, FAW Jilin, ranked tenth with a score of 833. A year ago, only Roewe was one of the top 10 brands, with a fourth-place score of 846.

Audi gets highest rating
Audi, China's best-selling luxury brand, ranks highest in sales satisfaction with a score of 869 on a 1,000-point scale and performs particularly well in most of the factors surveyed, including delivery and all the elements of the sales experience at the dealership.

Local car brands like Roewe are getting better at service
Local car brands like Roewe are getting better at service
For dealers, providing high levels of customer satisfaction may contribute to closing the deal, and bring in more revenue.

Among vehicle owners who indicate they are highly satisfied with the sales experience, 67% purchased a vehicle from that dealership. Among customers who indicate low levels of satisfaction, only 60% bought a car.

Audi controls a bigger slice of the market than German rivals BMW and Mercedes Benz. Last month, Audi's sales in China jumped nearly 68% to 22,358 units. China could eclipse Germany this year as its Audi's largest market, as luxury car sales in China continued to boom in August. For the first eight months of 2010, Audi's sales soared 63% over year-ago levels to 152,782 vehicles. Over the same period, its sales in Germany totaled 144,365 units.

Following Audi in the rankings are Volkswagen's Skoda (846), and BMW and FAW-Volkswagen, in a tie, each with a score of 842.

Dealership numbers growing
"Considering the tremendous growth among dealerships in China, with more than 1,000 new dealerships projected to open each year through 2015, in addition to the approximately 13,000 already established, process consistency will become particularly important. Customers who visit a particular brand's dealerships will expect the same levels of service at various locations," said Hannah Chao, a Shanghai-based research director at J.D. Power.

Implementation of the sales process does not mean rolling out "one-size-fits-all" standards across all markets, she added.

For example, there are significant regional differences in buyers' top considerations for vehicle purchase. Among new-vehicle buyers in tier one cities, for instance, vehicle quality is the most important consideration, while recommendations from family and friends are of primary importance to buyers in tier three cities.

"Taking regional differences into account is key to effectively appealing to buyers," Ms. Chao said. "For lower-tier markets, brands should focus their marketing strategies on generating effective and positive word of mouth recommendations, while more effort should be spent on communicating vehicle features and quality to buyers in tier one cities."

This special report was first published in Automotive News China, a publication of Crain Communications.

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