J.D. Power Observation: Car Sales Last Foot

The Chinese auto industry has entered an era of overcapacity, low profit, and slight growth, but consumers are more open to choice of models and brands, and 90% of customers are lost after entering the dealership. How to retain consumers at the doorstep of sales and turn potential customers into final customers? At the JD Power 2017 China Automotive Sales Satisfaction Study (SSI) press conference and seminar held recently , XD Juan, Senior Research Director of JD Power China, gave suggestions.


JD Power (Jun Di) Senior Research Director of China Xie Juan interpreted JD Power 2017 China Automotive Sales Satisfaction Study

China's auto industry has entered an era of overcapacity, low profit, and slight growth. How to turn potential customers into final deals at the doorstep of sales? At the JD Power 2017 China Automotive Sales Satisfaction Research (SSI) press conference and seminar held recently, Xie Juan, senior research director of Jundi China, gave suggestions.

In 2015, China's non-imported vehicle sales were 24.5 million units, with an overall production capacity of over 30 million units. It is estimated that by 2018, China's total passenger car production capacity will exceed 40 million units, and by 2020 it will exceed 50 million units. If it is measured at an annual increase rate of 5% from 2017 to 2020, it is undoubtedly an era of overcapacity.

On the one hand, there is continued excess capacity, on the other hand, increasingly thin profits. JD Power2017 China Dealer Satisfaction Study SM (DAS) shows that in the composition of dealers' profits, new car sales and service profits fell from 51% in FY2015 to 45% in FY2016. In addition, from FY2010 to FY2016, dealer sales and after-sales service revenues are getting lower and lower, and dealers ’bicycle marketing expenses are rising linearly, but the profits brought to dealers by individual sales staff and individual service consultants Thin, there is a "scissors gap" between expenditure and income.

2017 is an inflection point, defeating customers more than closing users

In an era of overcapacity, meager profit, and slight growth, consumers are also undergoing brand-new changes. JD Power 2017 China Automobile Sales Satisfaction Study shows that Chinese consumers consider an average of 2.3 brands when buying a new car, up from 1.8 brands last year. At the same time, consumers who clearly know the brands and models they need to buy have dropped from 68% in 2016 to 60%. This shows that in the era of overcapacity, low profit, and slight growth, consumers have encountered more open choices.

JD Power 2017 China Automobile Sales Satisfaction Study compares end-sale users with sales-lost users. In 2016 this ratio was 1: 0.7, but in 2017 it became 1: 1.1. The former shows that more users are left than lost users, while the latter means less left and more lost. 2017 is an inflection point, which means that dealers will lose 1.1 people when acquiring 1 customer.

A study of customers who lost sales found that 90% of customers were lost after entering 4S stores. Distributors pay a lot of marketing costs, but ultimately it is not worth the loss. We need to pay attention to the service power of the front door and the expressiveness of the terminal, so as to let the potential customers come in, rather than turning the potential customers into their "previous moment" intention customers.


90% of the customers are lost after arriving at the store, and the service power needs to be improved. Data source: JD Power2017 China car sales satisfaction research

Where did the 1.1 lost people go? JD Power 2017 China Automobile Sales Satisfaction Study found that among the three camps of joint venture brands, self-owned brands and luxury brands, the flow rate of joint venture brands to self-owned brands reached 11%.

Retain the three key contacts of the customer

The defeated customers in the sales process are mainly lost in the following stages: "Look at the real car at the dealership" (37%), "Talk with sales staff" (19%), "Try to negotiate prices with dealers" (17%), "Test ride / test drive" (16%) and "negotiation of contract / loan application / deposit" (1%). For these links that are easy to defeat, you can look for opportunities from the following three key points.

  • Sales staff "professionalism" needs to keep up with the times.
    19% of customers are lost in the "communication with sales staff" stage, which shows how important it is for salespeople to demonstrate professionalism in key links. The term "professional" was different from the challenge it encountered 10 years ago and today. In this day and age, users can obtain all vehicle information and evaluations of vehicles from the Internet before buying a car. This has put a new round of test on how sales staff show professionalism.
  • The use of sales to make consumers confident in prices and provide financial solutions to
    "try to negotiate prices with dealers" stage defeated customers ratio of 17%. Many customers are not satisfied with the transaction price during the bargaining process, because he found that the dealer will not give a final clear price, or always feel that the dealer does not provide a fair, transparent, and customer-focused transaction price, which requires a salesperson. From the perspective of sales, consumers can have confidence in the price. When consumers feel that the vehicle is too expensive or the dealer's quotation is too high, the dealer can also provide as many financial solutions as possible. JD Power 2017 car sales satisfaction research shows that the user satisfaction using the financial solution is 687 points, and the user satisfaction using cash to pay for all car models is 657 points. Distributors can use strategies at the service terminal to pry up customers who are price sensitive and easy to lose.
  • The test ride / test drive link displays performance and configuration in a targeted manner.
    16% of consumers are lost in the test ride / test drive phase. Among them, the "vehicle configuration and performance do not meet the requirements" is the most important reason. Therefore, during the test ride / test drive, a highly intimate contact with customers, it is particularly noteworthy to accurately understand the needs of customers and display the car performance and configuration according to customer needs.

High satisfaction does not mean high sales, but satisfaction is the cornerstone of the foundation

This year is the 18th consecutive year that JD Power has released a car sales satisfaction study in China. After JD Power has persistently promoted the importance of sales satisfaction for many years, auto manufacturers have invested tremendous efforts in all aspects of the car buying experience. Items that were previously regarded as additional value-added services by manufacturers have now become standard operating procedures for the entire industry. .

In the automotive industry, sales satisfaction and sales are key performance indicators for manufacturers and merchants. Sales volume is the external manifestation of the brand's explosive power, which can bring intuitive sales profits to the company; and satisfaction is the continuous delivery of the brand's durability, which determines the loyalty, recommendation, and return to the factory during the customer's life cycle, which determines the brand The reputation of the company and the health of the operation.

Sales satisfaction is only one of many gears that affect sales, not a 100% determinant. Satisfaction in the sales process will not be directly reflected in sales data, but it can greatly affect the reputation of the brand, help the brand retain its loyal fans, strengthen the moat, and help the long-term development of the brand. If a brand wants to achieve sustainable development and long-term foundation, it must not only focus on short-term sales and ignore long-term maintenance of user satisfaction.

The China Automobile Sales Satisfaction Study is one of the important research projects in the JD Power industry joint research. Since the first release of SSI in 2000, JD Power ’s SSI research model has been continuously updated with changes in the Chinese market. The sample size of research in 2017 was as high as 23,815, a significant increase of 57% compared with 2016. In addition, SSI also included a "lost customer" study , And involves “online experience” at the factor level. On July 27th, JD Power will also release the 2017 China Automotive After-sales Service Satisfaction Study SM (CSI), which evaluates the overall service and maintenance process of car owners with a car ownership period of 12 to 48 months for their dealer Satisfaction.


      JD Power works intensively in the Chinese market and unremittingly collects consumer voices

Since entering China in 2000, JD Power has been adhering to the spirit of intensive cultivation and tirelessly collecting customer voices. Over the past 18 years, JD Power has produced a total of 130 industry joint research reports. All of these reports are independently funded by JD Power to uphold the concepts of "Integrity, Independence, and Impact." A total of 60 million consumer voices have been collected so far, and 900,000 samples have been collected, taking a total of 600 months.

For more details on China Automotive Sales Satisfaction Study JD Power 2017, please contact:

Jiangzhong Jun
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