Gerardo Gómez
Director General Mexico
J.D. Power
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View from the Top

Analyzing the Automotive Market

Fri, 09/01/2017 - 13:32

Q: What advantages derive from comparing Mexico with other countries where J.D. Power has operations?

A: We listen to and represent customers. Our added value comes from measuring all OEMs by the same yardstick, so we can provide comparative feedback and they can improve their products. We know the competitors in the automotive industry and what their clients are looking for, which is valuable to OEMs when designing their strategies.

Our quality perception research is not only gathered in the national market. We also look at parallel information from the US and Japanese markets, identifying global customer needs and trends. We always consider presale services at the dealership, aftersales services such as repairs and follow-up, a vehicle’s quality perception and new product launches, gathering data at every stage.

Comparing several markets allows us to provide more extensive information because all the products in Mexico could potentially be exported to foreign markets. In Mexico, the retail stage is currently demanding most of our attention.

Q: What were the results of J.D. Power’s latest Sales Satisfaction Index?

A: BMW, Buick and Audi were the most popular in the luxury section while the top vehicles in the volume section were RAM, Honda and SEAT. This ranking was created according to customer satisfaction in a questionnaire that measures the same factors from different brands.

The questionnaire is completed by buyers seven months after purchasing a new vehicle. During these first few months buyers can still remember how they were treated, from when they crossed the dealership’s threshold to taking delivery of the vehicle.

Q: J.D. Power has found that fewer people are test-driving vehicles at car dealerships. Why is this?

A: We have found that fewer people are doing so because it involves a lot of paperwork and few people feel confident driving a vehicle that is not theirs. We are lobbying to make this procedure easier because it is the best way to compare brands, fall in love with a product and finalize a purchase. If test drives were simpler, it might make it easier to close a sale, which would boost domestic vehicle sales.

To change this tendency of customers not asking for test drives, dealerships must have clean vehicles available, with license plates and paperwork in order. Dealerships would like to make this process easier but negative experiences often stop them thinking about their customers and instead they focus on protecting the vehicle. The market must find a middle ground where the experience can be much more pleasant for the consumer but safe for the company.

Q: How can OEMs increase customer satisfaction when a vehicle is bought with a part-exchange?

A: Customers who leave a vehicle at a dealership as part of the deposit for a new vehicle reportedly have lower satisfaction rates than those who do not. We began evaluating this new area in 2015 to understand the quality of service during vehicle part-exchanges. The results indicate that excessive legal and tax-related red tape is not helping this transaction run smoothly. Dealerships will have to change how they sell to the public to match the current market conditions and service expectations.

When the customer negotiates a purchase with a partexchange, it is handled by two different departments that may deliver service differently, affecting clients’ perception of continuity within the brand. Concessionaries and dealerships must rethink this process to make the sale more customer-friendly. When people buy a vehicle, they sign 24 pieces of paper on average just for the vehicle to be delivered. If they also contract a car loan, that will require another 15-20 signatures. Requiring 40 signatures for a vehicle gives the impression that the process takes precedent over customers and their experience.