Key Trends in the Consumer Market for Light VehiclesFri, 09/25/2015 - 15:59
Covering the key trends in the consumer market for light vehicles, the next panel was moderated by Guillermo Rosales, Director General of AMDA, who opened by saying that Mexico has an annual consumption of 10 vehicles per 1,000 inhabitants. According to studies carried out by AMDA, demand in Mexico ought to reach 1,300,000 vehicles by the end of 2015.
Carlos Alberto López de Nava, Director General of Alden commented on the fact that companies are trying predict the future in order to preempt the innovative products of their competition. Alden has not yet suffered from the recent increase in consumption and has kept up with demand, but can recognize that they are dealing with a market dominated by the consumer. “Consumers are more informed and expect what they want to be available immediately, logistics companies and OEMs have to adjust their customer services accordingly,” said López de la Nava. “Services will become more affordable in dealerships, which follows in Honda’s footsteps as pioneers of establishing very cheap services.”
“When a client receives good customer service, the probability of them actually purchasing a vehicle doubles,” said Luis Gerardo Sánchez, Managing Director of Volvo Car México. The vast majority of people who are dissatisfied with customer service in dealerships do not tend to come back. López de Nava explains that another market tendency will be an increase in the number of alliances and automotive groups, because it is natural for companies entering a new country to look for partners that already understand the economy.
Rosales then explained the complications involved in the premium car market in a country like Mexico. He invited suggestions from Volvo regarding the necessary steps that need to be taken in order to compete. Gerardo Sánchez commented that the difference in volume is considerable. In response to a much smaller market for the premium sector, brands are becoming more flexible in their prices, lowering them to people who would not normally enter the market. The biggest change is the access to credit, which allows people to access a range of premium vehicles. “We have recently seen increased trust in the premium market,” he commented. “The next challenge is meeting customers’ expectations of differentiation in terms of quality and customer service.”
“The profile of the Mexican consumer is a person between 25 and 40 years preferring to acquire a car of around MX$200,000, but this is changing as younger drivers purchase cars and commercialization is changing in response,” explained Rosales. Fernando Gómez Arreola, CEO and Co-founder of Nexu commented that the internet is changing the way people purchase cars. “Nine out of ten people researching a new car, research online.” The rise of smartphones is increasing consumer knowledge. As interest rates lower, leasing and purchasing cars with credit has become a more accessible option for a greater portion of the demographics. The increasing proportion of people with income to buy cars for their family reflects a more developed country, and the average age of Nexu’s clients is 29 years.
Marcio Hociko, Operation Director of LeasePlan Mexico, concluded the panel by explaining that the traditional model of financing has a limit, leading to the arrival of more leasing companies. He also noted that leasing levels could reach 55%, depending on the fiscal benefits applied, and that Mexican companies retain the culture of buying, and there is a lot of ground to gain to change this mentality.