Darren Slind
Regional Practice Leader for Canada and Latin America
J.D. Power
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Insight

OEMs Need Right Studies to Understand Mexican Market

Mon, 09/01/2014 - 13:14

When entering an emerging economy like Mexico, having access to the right information is one of the most important weapons companies need to fully understand the market. J.D. Power provides just such information for the automotive sector by surveying millions of customers and businesses worldwide in order to understand market expectations regarding new products and services. J.D. Power carefully investigates which type of study will resonate in each automotive market. Some of its most indemand studies are the Sale Satisfaction Index (SSI) and the Vehicle Owner Satisfaction Study (VOSS). Darren Slind, Regional Practice Leader for Canada and Latin America of J.D. Power, explains the research methods used to craft relevant surveys. “The SSI is conducted in a number of markets, including Mexico, and is a reflection of how the Mexican consumer feels about the search, purchase, and delivery experience when buying a new vehicle. This benchmark study, which sees us chart performance across the entire industry, is used to learn which brands are seeing the best performance and which are meeting the expectations of new vehicle buyers. On the other hand, the VOSS includes an assessment on how the consumer feels about the quality of the vehicle after a period of between one and three years of ownership. The VOSS used to only be focused on the vehicle, but it now includes service experience as customers are increasingly evaluating the ability of a dealership to look after them.” The results of the 2013 VOSS, which evaluates vehicle ownership of 2011 and 2012 models across 5,500 owners, showed that new vehicle buyers in Mexico look for reliability, durability, and purchase price when buying a car. However, high insurance costs and increases in fuel prices remain the paramount concerns. Regarding the ranking for models, Nissan received three awards from J.D. Power for owner satisfaction and places itself as the OEM that won the most awards of 2013. Honda, Ford, and BMW received two model awards, while Mercedes-Benz, Renault and Dodge received one each.

When it comes to settling in emerging markets like Mexico, J.D. Power faces methodological challenges. According to Slind, one of the main differences between mature and emerging markets lies in the ways to access customers. 

While there is a public National Registration Source in the US that allows the company to contact customers for each type of vehicle, Mexico has no control over that type of information. “In emerging markets, we have to find the customers in the street and convince them to spend a few minutes to give us their feedback. We have to be careful on how research projects are conducted as it is not only our reputation on the line, but also that of the companies we are evaluating,” explains Slind. For Gerardo Gómez Gálvez, Director General of J.D. Power de México, the research industry in Mexico is improving its methodologies. “We are introducing different approaches and we are aiming to have more surveys in order to provide more feedback to the OEMs and the final customers,” comments Gómez Gálvez. “In order to provide a better service, OEMs and dealers in Mexico need to be aware of what the customers are looking for in their vehicles and of the constraints they are facing in financing, insuring, and maintaining their cars.”

The results of the studies conducted by J.D. Power have spotted needs of vehicle buyers over time. The most important finding is that while vehicle quality has improved significantly in the last 15 years, customers’ definition of quality has also changed. As vehicles come equipped with more technology, customers have turned their attention away from actual defects toward tougher issues, such as the ease of use of on-board technology. Slind explains that if a customer is not comfortable with the operation of some of the technologies installed, they will become highly frustrated. In consequence, a customer might well voice a poor opinion of a perfectly functional vehicle when the problem is that the user does not understand how to operate it. OEMs and dealerships now have to educate their customers on how to use added technology and gadgets, such as navigation systems and Bluetooth, that are migrating to lower segment vehicles. “This changes the definition of quality and how dealers have to respond to it. We are in a transition period in which no one has the perfect answer yet. What J.D Power can do is help dealers and OEMs fulfill customers’ expectations,” adds Slind. “The Mexican market will become mature once it fully understands and values the importance of surveys like those carried out by J.D. Power.”