JD Power Insight: In the new retail era, traditional and emerging auto companies need to know the way to win

Shanghai, July 23, 2018 – As the Chinese auto market shifts from “incremental competition” to “stock competition,” the entire auto market is increasingly highlighting the “zero-sum game” trend. Whether it is for traditional car manufacturers or the rising new forces in car manufacturing, in this era of slight growth in car sales, it is especially critical to successfully transfer online traffic to offline and promote sales. At the JD Power 2018 China Automotive Sales Satisfaction Research (SSI) media seminar held recently, XD Juan, senior research director of JD Power China, summarized the success of the automotive retail channel around the changes in consumer demand.

"Yan value" has become the most important motivation for young consumers to buy cars

In the new wave of auto consumption upgrades, the age structure of Chinese car buyers is becoming increasingly younger. The 2018 China Automobile Sales Satisfaction Study (SSI) shows that after 80s and 90s, young people account for 80% of the total consumer population. It is undoubtedly the main force of consumption, and the consumption potential has grown rapidly. A 2018 study showed that although the actual car purchase amount after the 90s was the lowest among the overall consumer population, the annual growth rate was higher, up 13% from 2017, and about 30% of the post-90s used auto finance loans when purchasing new cars.
This group of young consumers presents very different characteristics of consumer demand from their parents. XD Juan, Senior Research Director of JD Power China, summarized it into three areas:

• Look at the "face" generation and pay attention to product personalization. For young consumer groups, the car's face value, that is, its appearance, is the most important purchasing power. According to the JD Power 2018 China Automobile Sales Satisfaction Study (SSI), the main reason for consumers to buy cars after the 90s is "the vehicle looks good." In contrast, after 50s, consumers value "good product quality" most, and after 70s, they value "recommendations from friends / relatives."
• Make decisive decisions and pursue highly time-sensitive experiences. After 80s and 90s, consumers make faster car purchase decisions, and more than half of the time from entering the dealership for the first time to finally reaching a car purchase agreement takes less than a week; 17% will change cars within a year, and only less than 4% will make this decision after 50, 60 and 70. The "inefficient" experience will become an obstacle in the car purchase process. The study found that although the 80s and 90s value the test ride and test drive, once the time exceeds 30 minutes, the satisfaction score will decrease significantly.
• See more knowledge, prefer intelligent, all-round experience. When young consumers choose car brands, convenient online services are an important reference element. Before buying a car, they will also learn about the content of the car through the website / APP. “Word of mouth / review of vehicle users”, “social media content”, “use experience sharing of vehicle users” and “professional reviews of vehicles” grew significantly in 2018. The acquisition of this information makes them more fully prepared when buying a car, but it also means higher requirements for the professionalism of the sales staff. The study also found that the one-stop service and the explanation of vehicle configuration through digital means can better impress the new generation of consumers.

In the new retail era, "professional creation pleasure" empowers forward

As the growth rate of China's auto sales continues to slow down, competition in the entire auto market has become more intense. For auto companies and dealers, the customer traffic entering the store is "precious". However, according to the JD Power 2018 China Automotive Sales Satisfaction Study (SSI), 18% of consumers have been lost before entering the store; 44% of consumers have lost before actually communicating with sales representatives, and from the industry as a whole From a horizontal point of view, the attrition rate shows an upward trend. In the new retail format, how to maximize the online traffic into offline to promote sales is a problem that needs to be considered by both traditional channels and emerging channels.

Understanding the changing needs of generations is the foundation. During the 19 years of JD Power's China Car Sales Satisfaction Study (SSI), Chinese consumers' car purchase needs have undergone profound changes. In the 1.0 era, consumers are very rational, pursuing a sense of benefit, efficiency, and trust; in the 2.0 era, consumers prefer customized and humanized emotional needs; today's consumers hope that car manufacturers have both "body" and "heart" Can bring pleasant service to it.

Through research on the defeated users of sales, JD Power found that products and prices will not cause distributors to lose a customer forever, but the consumer experience of "unprofessional, dishonest, unfocused, and not easy" will. In addition, the study also found that although the overall sales performance of the industry in 2018 increased by 55% compared with 2017, there is still room for improvement in sales personnel and car purchase experience.

Therefore, at the moment when users can obtain all vehicle information and car buyer evaluations through the Internet, in addition to the active response within three minutes after the consumer enters the store, the sales staff should also strive for excellence in professionalism to create a browsing experience and sense The five-in-one service of experience, emotional experience, trust experience and interactive experience, "professional create pleasure".

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Media Contact: Wang Ruofei +86 21 8026 5804 / ruopei.wang@jdpa.com

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