Category: China

Retail Banking Satisfaction Improves Significantly; Decline in Loyalty Creates Both Risk and Market Opportunities for Retail Banks

2015-07-10

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Shanghai: 16 July 2015 — While customer satisfaction with retail banks in China has improved significantly in 2015, an increase in the number of consumer banking options has made financial institutions vulnerable to losing current customers and has created a market opportunity for retail banks, according to the JD Power 2015 China Retail Banking Satisfaction Study^SM (RBSS).

Now in its seventh year, the study[1] measures customer satisfaction with their bank across six factors: transactions; product offerings; account information; facility; fees; and problem resolution. Additionally, the study examines performance improvement initiatives designed to drive customer loyalty and advocacy.

Customer satisfaction with retail banks averages 787 points (on a 1,000-point scale) in 2015, a 34-point improvement from 2014. The annual improvement is primarily driven by significant increases in satisfaction across three factors: fees (+51 points); problem resolution (+37); and product offerings (+34).

The implementation of the “Measures for the Administration of the Service Prices of Commercial Banks” by the China Banking Regulatory Commission (CBRC) and the National Development and Reform Commission (NDRC) in August 2014, which mandates that banks reduce or eliminate bank charges such as interbank transfer fees, annual fees and account management fees, is likely to have influenced the improvement in satisfaction with fees among retail banking customers.

The banking industry’s efforts to improve fee transparency has positively impacted customer understanding of their fees, with 71 percent of customers saying they are “well informed” about the fees—an increase from 64 percent in 2014—and 74 percent indicating the fees are reasonable, up by 7 percentage points from 2014.

However, satisfaction with bank fees and fee transparency does not guarantee customer loyalty and advocacy, which is especially true among highly satisfied retail banking customers(overall satisfaction scores of 869 points and above). According to the study, 46 percent of customers who are highly satisfied with their bank say they “definitely would” stay with their current bank in the next 12 months—a decline from 54 percent in 2014—and 53 percent of them “definitely would” recommend their current bank to friends and family in the next 12 months, down from 57 percent last year.

“Today, retail banking customers in China have more types of investment and financial choices available to them than ever before, such as peer-to-peer lending platforms (P2P), Internet banking and brokerage firms, which has created additional pressure for banks to acquire and retain customers,” said Steven Zou director of the services industry at JD Power, Beijing.“ In this environment, customers have become more demanding and less loyal. Not only do retail banks need to improve the overall customer experience, but they also need to be innovative and provide digital branches, e-banks and customized products and services to retain their customers.”

Retail Banking Customer Satisfaction Ranking

• For the second consecutive year, Bank of Communications ranks highest, with a score of 837. Bank of Communications performs particularly well in the most impactful factor, transactions (41 points above average) and facility (47 points above average).
• China Minsheng Bank (830) ranks second and performs well in fees (101 points above average). Ping An Bank (825) ranks third, performing well in product offerings (66 points above average).
• Among the major four state-owned banks (Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank), Industrial and Commercial Bank of China receives the highest score in customer satisfaction.

The 2015 China Retail Banking Satisfaction Study examines 15 banks operating in China and is based on responses from 10,461 retail banking customers in 30 cities. The study was fielded between March and May 2015.

Media Relations Contacts

Michelle Meng; Beijing, China; +86 01 6569 2702; [email protected]

John Tews; Troy, Michigan USA; 001 248 680 6218;[email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/corporate

About McGraw Hill Financial www.mhfi.com

Significant Improvement in Sales Satisfaction with Domestic Brands Leads to an Increase in Brand Loyalty to the Automaker

2015-06-26

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Shanghai: 30 June 2015 — Overall customer satisfaction with the new-vehicle sales process increases in both the luxury and mass market segments, with the most significant improvement among Chinese domestic brands, which has led to an increase in the repurchase rate for these brands, according to the JD Power Asia Pacific 2015 China Sales Satisfaction Index (SSI) Study^SM released today. 

The study, now in its 16th year, measures customer satisfaction with the new-vehicle sales experience based on five factors (in order of importance): delivery process (23%); sales initiation (21%); deal (20%); dealer facility (19%); salesperson (17%). Sales satisfaction is calculated on a 1,000-point scale.

Overall sales satisfaction with luxury brands averages 720 in 2015, a 14 point increase from 2014, while satisfaction with mass market brands averages 682, up 11 points. In the luxury segment, delivery process satisfaction improves the most (+17 points) among all factors. In the mass market segment, dealer facility improves most (+14).

Domestic brands, compared with foreign or non-domestic brands, improve the most (+31 points) from 2014, which is the primary driver of the satisfaction increase in the mass market segment.

Higher levels of sales satisfaction have led to higher repurchase rates among customers whose first vehicle was a domestic brand. The same-make repurchase rate among domestic brand buyers has risen in each of the past three years— to 11 percent in 2015 from 7 percent in 2013—while the repurchase rates for all other brand origins have declined year over year.

“Domestic brands have been making tremendous efforts to improve the sales experience for new-vehicle buyers, with a special focus on building long-term customer relationships,” said Dr. Mei Songlin, vice president and managing director at JD Power Asia Pacific, Shanghai. “Those efforts have, in turn, been rewarded with an increase in sales volume and customer loyalty.”

Domestic brands have also made progress in building long-term customer loyalty through improved interactions. Among domestic brand buyers, 83 percent are introduced to service personnel during the delivery process, up from 81 percent in 2014. Satisfaction among these customers is 71 points higher than among those who are not introduced to service personnel.

The percentage of domestic brand customers who receive such services as scheduled a maintenance visit post-delivery has increased to 50 percent from 47 percent in 2014, and the percentage of those who receive an invitation to an owner event has increased to 22 percent from 13 percent. Satisfaction among these groups is 45 points higher than those who do not receive these initiatives after delivery.

KEY FINDINGS

• Nearly one fifth (17%) of new-vehicle buyers use a loan to finance their purchase. Satisfaction among this group is 54 points higher than among those who do not use a loan.
• Satisfaction among new-vehicle buyers whose dealer recommends the insurance company they prefer is 23 points higher than among those whose dealer does not recommend their preferred insurer (683 vs. 660, respectively). Among female buyers, satisfaction improves by 26 points when their dealer recommends their preferred insurer, compared with when their preferred insurer is not recommended (675 and 649, respectively).
• More than half (54%) of new-vehicle buyers indicate they used the Internet during their shopping process to search and compare vehicle information; make a test drive appointment; confirm a price; or make a deposit or full payment. Satisfaction among customers who use the Internet while shopping for a new vehicle is 703, which is 12 points higher than among those who do not use the Internet.

Rankings

For a third consecutive year, Audi ranks highest among luxury brands in satisfaction with the new-vehicle sales experience, with a score of 795. This also marks the sixth consecutive year Audi has ranked highest in the study[1]. Infiniti ranks second with a score of 760.

Beijing Hyundai ranks highest among mass market brands for the second consecutive year, with a score of 812. Dongfeng Citroen ranks second (799) and Dongfeng Nissan ranks third (777).

The 2015 China Sales Satisfaction Index (SSI) Study is based on responses from 15,633 vehicle owners who purchased their new vehicle between July 2014 and February 2015. The study was fielded from January through April 2015 in 57 major cities in China.

Media Relations Contacts

Michelle Meng; Beijing, China; +86 01 6569 2702; [email protected]

John Tews; Troy, Michigan USA; 001 248 680 6218; [email protected]

About JD Power Asia Pacific: www.jdpower.com

About JD Power and Advertising/Promotional Rules www.jdpower.com/corporate

About McGraw Hill Financial www.mhfi.com 

Vertical Websites Have the Greatest Impact on New-Vehicle Purchasing Decision

2015-06-25

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Shanghai: 26 June 2015 — The massive increase in Internet usage among new-vehicle buyers is creating opportunities for auto manufacturers and marketers to develop content in response to this behavior, specifically for vertical websites which have the highest penetration rate and greatest impact on new-vehicle purchasing decisions, according to the JD Power Asia Pacific 2015 China Auto Media Study ^SM (AMS) released today.

The study, now in its third year, evaluated the impact of various media, including traditional media (i.e., TV, outdoor, newspapers/ magazines and radio) and Internet- and digital-based new media (e.g., vertical websites, general websites, mobile platforms, search engine and social media) on different age-groups of  new-vehicle buyers in each phase (awareness, consideration and final-decision-making) of their  new-vehicle purchase decision-making process. Manufacturers and advertising agencies can use study findings in developing effective and comprehensive marketing strategies by examining the media preference and consumption behaviors of their targeted audience.

The Internet is pervasive in the everyday life for most consumers, especially among younger new-vehicle buyers (born after 1980), whose Internet usage rate, according to the study, is as high as 99 percent. On average, new-vehicle buyers in China spend 30.7 hours online per week, up from 21.0 hours in 2013, with 41.4 percent of that time spent on a smartphone. This creates great opportunities for auto manufacturers and marketers to use new media (online media), which is utilized by 90 percent of consumers as their main source of new-vehicle information during the purchasing process in contrast to the 51 percent who use traditional media.

“New media, which is convenient and impactful given the depth and breadth of information available on the Internet compared with traditional media, has become the main source of information for new-vehicle purchase decision-making,” said Ann Xie, senior project manager of research practice at JD Power Asia Pacific. “Auto manufacturers need to develop online marketing strategies using different types of Internet and digital media channels to increase sales and customer loyalty.”

Among all new media, vertical websites, specialized websites that provide automotive-related content and services, have the highest penetration rate and impact on new-vehicle purchase. Slightly more than two-thirds (68%) of new-vehicle buyers indicate having visited vertical websites/ forums during their purchasing period; 53 percent indicate having visited general websites; and 49 percent used search engines. Buyers born 1990 to 1999 use vertical websites and average of 18.3 times per month, the most among all age groups included in the study.

New-vehicle buyers also rate vertical websites as the most influential media on making their final purchase decision (3.74 points on a 5-point scale). The information new-vehicle buyers seek on vertical websites is model detail information (52%), vehicle price/ promotion information (48%), netizen comments—comments from consumers online—(33%) and new auto release/ launch news (30%). Less than 30 percent of buyers search for such information on portal or search engines.

The study finds that WeChat is the most frequently used media channel by new-vehicle buyers (33 times per month, on average), but has considerably low influence on purchase decisions, as only 3 percent of buyers use it to acquire model and price information. However, buyers born in the 1990s are willing to share their purchase information with others, especially via WeChat (33%), with 69 percent of the comments being positive, which could create greater word-of-mouth influence on purchase preferences.    

Key Findings

•  When making a purchase decision, 22 percent of buyers of Chinese domestic branded new vehicles are influenced by recommendations from their friends and family, compared with 17 percent of buyers of international brands. However, buyers of international branded vehicles spend an average of  5.6 hours more than domestic brand buyers searching the Internet prior to their purchase.
• ŸLess than one-fifth (17%) of new-vehicle buyers follow a manufacturers’ official WeChat or Weibo account, mostly for vehicle maintenance information (64%), new-vehicle release (52%) and driving strategy (42%). Nearly one-half (47%) of them forward manufacturers’ WeChat or Weibo content to others. Among all generations, buyers born in the 1990s have the highest rate of following a manufacturer’s official WeChat or Weibo account (26%).
• ŸForty percent of buyers born in the 1990s look for vehicle information on video websites, the highest rate among all age groups.
• ŸNon-Internet shoppers have a much higher rate of dropping out of the purchase process during the price negotiation stage than Internet shoppers (33% vs. 22%, respectively).
• ŸManufacturer websites have the highest impact on new-vehicle purchase decision (3.75 points on a 5-point scale), but their penetration rate is considerably low at 35 percent.

The 2015 China Auto Media Study is based on responses from 15,633 vehicle owners who purchased their new vehicle between July 2014 and February 2015. The study was fielded from January 2015 to April 2015 in 57 major cities across China.

Media Relations Contacts

Michelle Meng; Beijing, China; +86 01 6569 2702; [email protected]

John Tews; Troy, Michigan USA; 001 248 680 6218;[email protected]

About JD Power Asia Pacific: www.jdpower.com

About JD Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

About McGraw Hill Financial www.mhfi.com 

Value-added Service, Especially a Friendly and Trustworthy Service Advisor, Positively Impacts Service Loyalty toward Authorized Dealers

2014-12-23

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Shanghai: 26 December 2014 — Providing value-added services, such as reminders for periodic maintenance, free maintenance/ repairs/ checks and 24 hour road-side assistance, in addition to friendly and trustworthy service advisors who advocate on behalf of their customers, drives retention and customer service loyalty toward authorized dealerships, according to the JD Power Asia Pacific 2014 China Service Loyalty Study^SM (SLS) released today.  

The study measures customer loyalty toward authorized dealerships during the first three to four years of vehicle ownership, based on customer service experiences in the past 12 months. Customer service loyalty is measured across four factors (in order of importance): dealer reputation (32%); value (25%); service quality (22%); and service interaction (21%). Overall loyalty is measured on a 1,000-point scale, with a higher score indicating higher levels of loyalty. Since the “three guarantees” policy, which regulates vehicle warranties, was implemented in October 2013, survey respondents were not affected as their vehicles do not fall under the umbrella of the policy.

The dealer reputation factor—which includes reputation of the authorized dealership; reliability of the service advisor; and the technical ability of maintenance/ repair—has the greatest impact on service loyalty. The most impactful key performance indicator (KPI) on overall service loyalty is transparency with the service process, followed by reasonable service charges and familiar relationship with the service advisor. When these KPIs are met, service loyalty increases by 47 points, 40 points and 33 points, respectively.

Having a close and trusted relationship with a service advisor impacts customer retention and loyalty toward an authorized dealership among both luxury and mass market vehicle owners. While 8 percent of luxury vehicle owners indicate they have a very familiar and trustworthy relationship with their service advisor, only 6 percent of mass market vehicle owners say the same. However, when a dealer provides a friendly and trustworthy service advisor, 49 percent of luxury vehicle owners and 33 percent of mass market owners say they “definitely will” go back to their authorized dealership for service.

“Compared with non-authorized dealers whose location is often more convenient and lower priced, authorized dealerships build customer service loyalty by providing trust and excellent service quality,” said Dr. Mei Songlin, vice president and managing director at JD Power China. “To retain and increase customer service loyalty, authorized dealers should consider providing more personalized services to customers who are less sensitive to price but more interested in developing a trusted, familiar relationship with a service advisor.”

KEY FINDINGS

• Nearly one-third (29%) of vehicle owners visit authorized dealers because they consider the facility trustworthy, compared with 2 percent of those visiting non-authorized dealers who indicate the same. Additionally, 25 percent of vehicle owners perceive that authorized dealers perform higher-quality work, compared with 2 percent of owners visiting non-authorized dealers.
• Nearly one-third (31%) of owners of high loyalty brand vehicles (726 points and above) say they “definitely will” recommend the model they purchased, and 13 percent say they “definitely will” repurchase the same brand. Owners of low service loyalty brands (673 and below) are less likely to say they “definitely will” recommend (20%) and repurchase (8%). 
• More than half (57%) of vehicle owners prefer non-authorized dealers because of their competitive price, compared with 2 percent of those who prefer authorized dealers for the same reason.  Additionally, 14 percent of owners visit non-authorized dealers for location convenience, compared with 8 percent of those who visit authorized dealers.
• Service loyalty has a significant correlation with customer satisfaction on the cost of servicing the vehicle. The more satisfied owners are with the cost of servicing their vehicle at an authorized dealer, the higher their service loyalty toward their dealer. Conversely, the less satisfied owners are with the cost of servicing at their dealer, the lower their service loyalty. 
• The overall service loyalty index among owners of luxury brand vehicles (759) is 51 points higher than service loyalty among owners of  mass market brands (708). By country origin, Korean makes perform highest in service loyalty with a score of 754, which is 39 points higher than makes from other countries.

The 2014 China Service Loyalty Study (SLS) is based on evaluations from 17,054 owners of vehicles purchased between June 2010 and August 2011. The study analyzes 55 different brands, and was fielded from June to September 2014 in 43 major cities across China.

Media Relations Contacts

Michelle Meng; Beijing, China; +86 01 6569 2702; [email protected]

John Tews; Troy, Michigan USA; 001 248 680 6218; [email protected]

About JD Power Asia Pacific: www.jdpower.com

About JD Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

About McGraw Hill Financial www.mhfi.com 

Sport Utility Vehicles Capture the Highest APEAL Score Among Body Styles

2014-12-12

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BANGKOK: 19 December 2014 — Sport utility vehicles are more appealing to new-vehicle owners in Thailand than pickup trucks, passenger cars or multi-purpose vehicles (MPV) in 2014, according to the JD Power Asia Pacific 2014 Thailand Automotive Performance, Execution and Layout (APEAL) Study^SM released today.

Now in its 12th year, the APEAL Study is an owner-reported measure of what satisfies owners in Thailand about their new vehicle’s performance and design during the first two to six months of ownership. The study examines nearly 100 attributes in 10 vehicle categories: exterior; interior; storage and space; audio/ entertainment/ navigation; seats; HVAC; driving dynamics; engine/ transmission; visibility and driving safety; and fuel economy. APEAL study performance is reported as an index score based on a 1,000-point scale, with a higher score indicating higher satisfaction.

“The utility vehicle segment is gaining momentum in Thailand, driven by strong appeal of both new full-size and, more recently, compact SUV models,” said Loic Pean, senior manager at JD Power Asia Pacific. “While luxury and premium midsize sedan cars remain the most desired at the segment level, new-vehicle buyers enjoy the look and feel of these new sport utility vehicles, particularly their driving dynamics, visibility and driving safety features under various driving conditions. They are also attracted to the interior design and affordable pricing.”

KEY FINDINGS

• Overall APEAL averages 905 in 2014, up from 903 in 2013.
• Sport utility vehicles (SUVs) achieve the highest APEAL score among the body styles (914). At the segment level, premium midsize cars and full-size SUVs earn the highest scores (931 and 917, respectively).
• Among passenger car owners, the importance of seats in 2014 (13%) has increased from 2013 (11%). In the pickup segments, new-vehicle owners are most concerned with visibility and driving safety (16%), which is the most improved vehicle category (+4 percentage points) from 2013. Among utility vehicle owners, the importance of visibility and driving safety increases notably to 12 percent in 2014 from 8 percent in 2013, and driving dynamics increases to 14 percent from 10 percent year over year.
• Satisfaction in most vehicle categories remains on par or improves, except in seats
  (-1 point) and fuel economy (-5 points).
• Satisfaction is higher among new-vehicle owners who were informed about the fuel efficiency of their vehicle by the dealer prior to purchase (909) than among those who were not informed (904).
• The study finds a close relationship with customer satisfaction and brand repurchase intention. Among customers who are highly satisfied (providing a satisfaction rating of 10 on a 10-point scale) with overall vehicle attractiveness 60 percent say they “definitely would” repurchase the same brand. When customers are less satisfied with vehicle attractiveness (ratings of 8 or 9 points) repurchase intention drops to 42 percent. Among disappointed or indifferent customers (ratings of 1 to 7 points), repurchase intention drops significantly to six percent.

2014 Thailand APEAL Study Rankings

Among the 83 models included in the study, the following rank highest in their respective segments:

• Four models from Mazda—Mazda2 Elegance (tie); Mazda3; CX-5 (tie); and BT-50 PRO Hi-Racer D-Cab
• Four models from Toyota—Yaris; Fortuner (tie); Hilux Vigo Champ S-Cab; and Hilux Vigo Champ Prerunner Smart Cab
• Two models from Honda—City (tie) and Accord

The 2014 Thailand APEAL Study is based on evaluations from 4,877 owners who purchased their new vehicle between October 2013 and June 2014. The study covers 12 different brands that include 83 different passenger car, pickup truck and utility vehicle models. The study was fielded between April and August 2014.

Media Relations Contacts

Xingti Liu; JD Power Asia Pacific; 8-Shenton Way, #44-02/03/04; Singapore; Phone +65-6733-8980; [email protected]

John Tews; Director, Media Relations; JD Power; Troy, Michigan 48083 USA; +001 248-680-6218; [email protected]

About JD Power Asia Pacific: www.jdpower.com

About JD Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

About McGraw Hill Financial: McGraw Hill Financial  (NYSE: MHFI) is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company’s iconic brands include: Standard & Poor’s Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL and JD Power. The Company has approximately 17,000 employees in 30 countries. Additional information is available at www.mhfi.com.

Engine and Transmission Issues Top List of Problems for Mass Market Vehicles,
Affecting Customer Loyalty

2014-12-12

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Shanghai: 16 December 2014 — Engine and transmission problems are the most frequently reported vehicle dependability issues among mass market brands, according to the JD Power Asia Pacific 2014 China Vehicle Dependability Study^SM (VDS) released today.

Now in its fifth year, the study measures problems experienced during the past six months by original owners of vehicles after 37 to 48 months of ownership. The study examines 202 problem symptoms across eight categories: engine and transmission; vehicle exterior; driving experience; features/ controls/ displays; audio/ entertainment/ navigation; seats; heating, ventilation and cooling (HVAC); and vehicle interior. Overall dependability is determined by the number of problems experienced per 100 vehicles (PP100), with a lower score reflecting higher quality.

Overall vehicle dependability averages 146 PP100 in the luxury segment and 196 PP100 in the mass market segment. Owners of mass market vehicles most frequently report engine and transmission problems, accounting for the majority of the 50 PP100-gap in performance between mass market and luxury brands. The most common problems among luxury vehicles are in the features/ controls/ display category.

Engine and transmission problems are also the primary contributor to the performance gap between Chinese domestic (224 PP100) and international (185 PP100) brands, followed by vehicle exterior (11 PP100). Owners of domestic brands report problems with the gearshift being hard to operate and the engine losing power when the air conditioning is on—both engine and transmission problems—more often than owners of international brands (13 PP100 vs. 6 PP100, respectively).

Engine/ transmission issues are also among the top five most bothersome problems cited by vehicle owners: engine loses power when air conditioning is on and excessive fuel consumption. Among owners who indicate that excessive fuel consumption is among the most bothersome problems they experience, 57 percent have driven their vehicle fewer than 20,000 kilometers and 28 percent indicate the fuel consumption problem is severe enough that they may not repurchase the same brand when they shop for their next vehicle.

“While auto manufacturers are continually looking for ways to improve fuel economy, problems with engine/ transmission remain and continue to be the greatest challenge for automakers,” said Dr. Mei Songlin, vice president and managing director at JD Power China. “Innovation should not mean a compromise of quality, specifically because greater loyalty is one of the results that come from owners experiencing fewer problems with their vehicle.”

Key Findings

• When examining vehicle dependability by origin, Korean makes have the fewest number of problems, averaging 163 PP100, which is 33 PP100 fewer than the mass market average of 196 PP100.
• For the first time since 2010, the features/ controls/ displays category has the second-largest number of reported problems.
• Windshield wipers/ washers are broken or not working properly is among the most common vehicle dependability problems in both the luxury and mass market segments.

2014 China VDS Ranking Highlights

BMW ranks highest in vehicle dependability among luxury nameplates, averaging 137 PP100. Cadillac ranks second with 146 PP100.

Volkswagen ranks highest among mass market nameplates, with a score of 144 PP100. Beijing Hyundai ranks second (158 PP100) and Guangqi Honda ranks third (165 PP100).

Models from Beijing Hyundai rank highest in three of the 10 award segments. Chinese brands rank highest in four vehicle segments. BMW, Guangqi Honda and Dongfeng Yueda Kia each rank highest in one segment.

Models ranking highest overall in their respective segments are:

• ŸCompact mini: Changan Benben Mini
• Compact: Geely Kingkong/ Jinying
• Compact upper: Hyundai Accent
• Midsize basic; Hyundai Elantra
• Midsize: Hyundai Yuedong Elantra
• Midsize upper: Honda Accord
• Midsize luxury: BMW 5 Series
• Midsize SUV: KIA Sportage
• Compact MPV: Wuling Hongguang
• Mini van: Wuling Sunshine

The 2014 China Vehicle Dependability Study (VDS) is based on evaluations from 17,054 owners of vehicles purchased between June 2010 and August 2011. The study analyzes models in 20 vehicle segments, which include 155 different passenger-vehicle models from 55 different brands. The study was fielded from June to September 2014 in 43 major cities across China.

Media Relations Contacts

Michelle Meng; Beijing, China; +86 01 6569 2702; [email protected]

John Tews; Troy, Michigan USA; 001 248 680 6218; [email protected]

About JD Power Asia Pacific: www.jdpower.com

About JD Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

About McGraw Hill Financial www.mhfi.com 

Significant Decline in New-Vehicle Appeal for Premium Makes As Customers Expect More Technology Innovation

2014-11-25

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Shanghai: 28 November 2014 — New-vehicle appeal of premium makes has significantly declined as  customer expectations for design, new features and innovative technology continue to increase, according to the JD Power Asia Pacific 2014 China Automotive Performance, Execution and Layout (APEAL) Study^SM released today.

The APEAL Study, now in its 12th year, serves as the industry benchmark for new-vehicle appeal. It measures how gratifying a new vehicle is to own and drive, based on owner evaluations during the first two to six months of ownership. The study examines 82 attributes across 10 vehicle performance categories: vehicle exterior; vehicle interior; storage and space; audio/ entertainment/ navigation; seats; HVAC; driving dynamics; engine/ transmission; visibility and driving safety; and fuel economy.

The overall APEAL index score has declined for a third consecutive year, to 800 (on a 1,000-point score) in 2014 from its peak of 825 in 2011. The decline is more prominent in the luxury market (-11) than in the mass market (-3). Premium makes are having hard time satisfying a much higher customer expectation with new-vehicle appeal in such a competitive environment.

Vehicle owners are most dissatisfied with the seats and seat-related features of their new premium vehicle. Satisfaction ratings declined most for seat-related features such as how easy it is to reach and operate the seat control. Customers are also disappointed with clarity of rear seat entertainment video display and the quality of the audio bass.

The advantage for APEAL scores between owners with an installed navigation system, hands-free communication and Bluetooth technology and those without this technology installed has narrowed to 22 points in 2014 from 41 points in 2009. The installation rate of this technology in premium vehicles increased to above 80 percent from less than 60 percent in 2009.

Premium car owners have high expectations with the audio/entertainment/navigation system, hands-free communication and Bluetooth technology of their luxury vehicle. However, as the rate of installation increases, customers view this technology as commonplace. Not only do customers want their technology to work seamlessly, they want more technology breakthrough in their vehicles, which places a strain on manufacturers as they try to keep up with the pace of technology development.

“Rising consumer expectations for innovation is driving automakers to continually reach to a higher level when trying to solve the most difficult challenges,” said Dr. Mei Songlin, vice president and managing director at JD Power Asia Pacific. “A continuous effort to meet these expectations is the most effective way to attract and satisfy new-vehicle buyers.”

2014 China APEAL Ranking Highlights

Land Rover ranks highest among luxury makes, with a score of 850. Porsche (847) ranks second among luxury brands, and Cadillac ranks third (843).

Dongfeng Yueda Kia ranks highest among mass market makes, with a score of 842. Beijing Hyundai ranks second (837), and Volkswagen ranks third (823).

Korean makes (838) have been the highest-performing makes by country origin since 2011.

Among the 16 model-level segment awards, Beijing Hyundai (Verna, Langdong Elantra, Sonata and Tucson) receives four awards. Shanghai General Motors (Cadillac XTS and Buick Encore) and FAW-Volkswagen (Jetta and Magotan) receive two awards each. Five of the highest-ranked models (smart fortwo, Hyundai Langdong Elantra, Cadillac XTS, Buick Encore and Volvo XC60) are also award recipients in the JD Power Asia Pacific 2014 China Initial Quality Study^SM (IQS). In total, 14 vehicle segments are eligible for awards in the 2014 China APEAL Study. Models receiving segment awards are:

• Compact Mini: smart fortwo
• Compact: Geely Freedom Ship
• Compact Upper: Hyundai Verna
• Midsize Basic: Volkswagen Jetta
• Midsize: Hyundai Langdong Elantra
• Midsize Upper: Hyundai Sonata and Volkswagen Magotan
• Midsize Luxury: Cadillac XTS
• Compact SUV: Buick Encore
• Midsize SUV: Hyundai Tucson
• Large SUV: Toyota Land Cruiser Prado
• Midsize Luxury SUV: Volvo XC60
• Large Luxury SUV: Porsche Cayenne
• Midsize MPV: Volkswagen Touran
• Mini Van: BAIC Weiwang 306 and Wuling Rongguang

The 2014 China Automotive Performance, Execution and Layout (APEAL) Study is based on evaluations from 20,731 owners of new vehicles purchased between October 2013 and June 2014. The study analyzes models in 21 vehicle segments and includes 212 different passenger-vehicle models from 62 different brands. The study was fielded from April to August 2014 in 51 major cities across China.

Media Relations Contacts

Michelle Meng; Beijing, China; +86 01 6569 2702; [email protected]

John Tews; Troy, Michigan USA; 001 248 680 6218; [email protected]

About JD Power Asia Pacific: www.jdpower.com

About JD Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

About McGraw Hill Financial www.mhfi.com 

Initial Quality Improves Significantly in China as the Quality Gap Between Domestic and International Brands Continues to Narrow

2014-10-29

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Shanghai: 31 October 2014 — New-vehicle initial quality in China continues to improve significantly, with Chinese brands further narrowing the quality gap with international brands, according to the
JD Power Asia Pacific 2014 China Initial Quality Study^SM (IQS) released today.

Now in its 15th year, the study serves as the industry benchmark for new-vehicle quality by examining problems experienced by new-vehicle owners within the first two to six months of ownership in two distinct categories: design-related problems and defects and malfunctions. The overall initial quality score is determined by problems reported per 100 vehicles (PP100), with a lower number of problems indicating higher quality.

Overall initial quality averages 104 PP100 in 2014, an improvement from 119 PP100 in 2013. Defect/ Malfunction problems have decreased by 14 percent year over year to 59 PP100 in 2014, while design-related problems have decreased by 3 percent to 34 PP100.

“The industry has made tremendous efforts to reduce the number of defect and malfunction problems,” said Dr. Mei Songlin, vice president and managing director at JD Power Asia Pacific. “While that success is worth celebrating, the industry needs to pay more attention to design-related problems.”

The initial quality score for domestic Chinese brands improves to 131 PP100 in 2014 from 155 PP100 in 2013, while the quality of international brands improves to 95 PP100 from 104 PP100. As a result, the gap in quality scores between domestic brands and international brands continues to narrow for the fourth consecutive year, and stands at 36 PP100 in 2014. Among all domestic brands, there are six brands whose initial quality score is above the mass market industry average (110 PP100): GAC Trumpchi (99 PP100), Southeast (106 PP100), Venucia (106 PP100), Luxgen (108 PP100), Roewe (108 PP100) and Zhonghua (108 PP100).

When examining initial quality by city tier, owners of domestic brand vehicles report fewer problems in Tier 2 (136 PP100) and Tier 3 (118 PP100) cities than in Tier 1 cities (146 PP100). The quality advantage in Tier 2 and Tier 3 cities has not yet translated to improved demand for domestic vehicles as evidenced by the JD Power Asia Pacific 2014 China New-Vehicle Intender Study^SM (NVIS), released in August, which finds that purchase consideration among new-vehicle shoppers of domestic brands in China has decreased in those two tiers to 16 percent and 20 percent, respectively. Brand image of domestic brands has lagged behind their quality improvement. 

“The domestic brands are focused on, and have been successful in, improving initial quality,” said Tony Zhou, automotive research director at JD Power China operations. “However, more marketing actions should be taken to build brand image and influence, which are other critical elements for the Chinese brands, especially in Tier 2 and Tier 3 cities.”

Key Findings

• ŸHigh initial quality is an important driver of brand advocacy which can influence the consideration and shopping for a brand. Among owners who do not experience any problems with their vehicle, 40 percent say they “definitely would” recommend the make to others. The recommendation rate drops to 25 percent among owners who experience one or more problems.
• ŸThe quality improvement is greatest in the driving experience category, which has a 19 percentage point decrease in problems to 22 PP100. Engine/ Transmission is the most problematic category (30 PP100).
• ŸExcessive fuel consumption remains the most frequently reported problem for the eighth consecutive year. The other top five reported problems are breaks are noisy; engine loses power; excessive wind noise; and abnormal engine noises.

2014 China IQS Ranking Highlights

Porsche ranks highest in initial quality among luxury nameplates, with a score of 37 PP100. Volvo (45 PP100) ranks second among luxury brands and BMW ranks third (49 PP100).

Volkswagen ranks highest among mass market nameplates with a score of 52 PP100. Subaru ranks second (58 PP100) and smart ranks third (59 PP100).

Among the 15 model-level segment awards, Mercedes-Benz (M-Class and smart fortwo), GAC Toyota (Highlander and E’Z) and Shanghai General Motors (Cadillac XTS and Buick Encore) each receive two awards. Chinese brands collectively have three models that rank highest in their respective segments: BAIC E Series; Great Wall Tengyi C30; and Changan Taurus.

In total, 14 vehicle segments are eligible for awards in the 2014 China Initial Quality Study. Models receiving segment awards are:

• Compact Mini: smart fortwo
• Compact: BAIC E Series
• Compact Upper: Kia K2
• Midsize Basic: Great Wall Tengyi C30
• Midsize: Hyundai Langdong Elantra
• Midsize Upper: Volkswagen CC
• Midsize Luxury: BMW 5 Series and Cadillac XTS
• Compact SUV: Buick Encore
• Midsize SUV: Subaru Forester
• Large SUV: Toyota Highlander
• Midsize Luxury SUV: Volvo XC60
• Large Luxury SUV: Mercedes-Benz M-Class
• Midsize MPV: Toyota E’Z
• Mini Van: Changan Taurus

 The 2014 China Initial Quality Study (IQS) is based on evaluations from 21,311 owners of new vehicles purchased between October 2013 and June 2014. The study analyzes models in 21 vehicle segments and includes 212 different passenger-vehicle models from 62 different brands. The study was fielded from April to August 2014 in 51 major cities across China.

Media Relations Contacts

Michelle Meng; Beijing, China; +86 01 6569 2702; [email protected]

John Tews; Troy, Michigan USA; 001 248 680 6218;[email protected]

About JD Power Asia Pacific: www.jdpower.com

About JD Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

About McGraw Hill Financial www.mhfi.com 

Satisfaction Increases Significantly When Automotive Dealerships Use Tablets or Smartphones during the New-Vehicle Sales Process

2014-06-30

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Shanghai: 30 June 2014 — Sales satisfaction among new-vehicle buyers is significantly higher when their salesperson uses a tablet/ smartphone during the sales process, according to the JD Power Asia Pacific 2014 China Sales Satisfaction Index (SSI) Study^SM released today.  

Satisfaction is 96 points higher among new-vehicle shoppers when their salesperson uses a tablet/ smartphone than when their salesperson does not use one of these devices during the sales process (762 vs. 666, respectively, on a 1,000-point scale). However, tablet usage remains relatively low compared to traditional sales tools such as product brochures, DVDs or desktop/laptop computers, with only 9 percent of dealership salespeople using these devices. Satisfaction averages 706 when shoppers are presented with vehicle features on a computer or DVD and drops to 684 when catalogs or brochures are used.

“The study finds that tablets and smartphones are very effective tools in helping consumers understand vehicle features during the sales process,” said Dr. Mei Songlin, vice president and managing director at JD Power Asia Pacific, Shanghai. “Providing shoppers with sales information on a single platform that allows them to easily browse options and features creates an opportunity to improve the overall sales experience, yet dealers are still missing this opportunity.”

KEY FINDINGS

• The gap in sales satisfaction between the luxury and mass market segments increases to 35 index points in 2014 (706 vs. 671, respectively) from 18 points in 2013, largely driven by a 41-point improvement in satisfaction in the luxury segment from 665 in 2013.
• Among all brands of origin, Korean automakers achieve the highest satisfaction at 762, which is 91 points higher than the mass market average. 
• Sales satisfaction in the luxury segment is a significant 83 points higher among vehicle owners who indicate their salesperson accompanied them at all times during the sales process than among those who indicate otherwise (711 vs. 628, respectively).
• Sales satisfaction increases by 60 points when dealerships offer shoppers at least 25 minutes to test drive a vehicle than when they offer a shorter test-drive period (723 vs. 663, respectively). The average test drive time is 19 minutes.

Rankings

• Overall sales satisfaction improves to 674 in 2014 from 649 in 2013.
• Audi ranks highest among luxury brands in satisfaction with the new-vehicle buying experience (793). 
• Beijing Hyundai and Dongfeng Citroen rank highest in a tie among mass market brands (772 each).  Dongfeng Nissan ranks third with a score of 765.

The 2014 China Sales Satisfaction Index (SSI) Study is based on responses from 15,388 vehicle owners who purchased or leased their new vehicle between July 2013 and February 2014. The study was fielded from January through April 2014 in 51 major cities in China.

Overall Vehicle Dependability in China Declines Slightly; Windshield Wipers and Washer Broken/ Not Working Properly Is the Most Common Problem

2013-12-20

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SHANGHAI: 20 December 2013 — Overall vehicle long-term dependability in China declines slightly in 2013, according to the JD Power Asia Pacific 2013 China Vehicle Dependability Study^SM (VDS) released today. 

Now in its fourth year, the study measures problems experienced during the past six months by original owners of vehicles after 25 to 36 months of ownership and includes 202 problem symptoms across eight categories: engine and transmission; vehicle exterior; driving experience; features/ controls/ displays; audio/ entertainment/ navigation; seats; heating, ventilation and cooling (HVAC); and vehicle interior. Overall dependability is determined by the number of problems experienced per 100 vehicles (PP100), with a lower score reflecting higher quality.

Overall vehicle dependability in 2013 averages 201 PP100, a slight increase from 196 PP100 in 2012.  Problem increase occurs in the following categories: driving experience; features/ controls/ displays; HVAC; vehicle interior; and audio/ entertainment/ navigation. The study also finds that 50 percent of owners indicate they have replaced at least one vehicle component during the past six months.

Windshield wipers and washer broken/ not working properly are reported as the most common problem with approximately 10 PP100 . There are approximately 9 PP100 of the windshield wipers and washer problem with international brands, and about 13 PP100 with domestic brands.

“With striking strides made across the board in terms of the initial quality, now is time the Chinese automobile industry shifts the focus to long-term dependability,” said Dr. Mei Songlin, vice president and managing director of JD Power China. “Consistent efforts in improving vehicle durability will likely pay off in terms of customer perceptions in due time and create market differentiation.”

Long-term dependability has become a prominent challenge for the industry particularly with the Three Guarantee policy going into effect in China, added Mei.

2013 VDS Ranking Highlights

Lexus ranks highest among the 51 nameplates  included in the study, averaging 66 PP100. Cadillac (77 PP100) ranks second, followed by Volvo (86 PP100); BMW (92 PP100); and Hyundai (117 PP100). Baojun (158 PP100) and MG (169 PP100)—both Chinese domestic brands—perform above industry average, ranking 12th and 15,th respectively.  

Models from Japanese brands rank highest in four of the 10 award segments. Chinese domestic brands rank highest in three segments, while U.S. brand Shanghai General Motors ranks highest in two segments. European brand BMW ranks highest in one segment. Models ranking highest overall in their respective segments are:

• Compact: Baojun Lechi
• Premium Compact: Suzuki Swift
• Entry Midsize: Chevrolet Aveo/Lova
• Midsize: Honda City Fengfan
• Lower Premium Midsize: MG 6
• Upper Premium Midsize: Toyota Reiz
• Luxury: BMW 7 Series
• SUV: Toyota Land Cruiser Prado
• MPV: Buick New GL8
• Mini Van: Wuling Hongguang

Frequently Reported Problems

The top five most frequently reported problems in 2013 are windshield wipers or washers are broken or not working properly; brakes are noisy; engine loses power when air conditioning is turned on; air conditioning doesn’t get cold enough fast enough; and excessive wind noise.  These top problems are consistent with those in the 2011 and 2012 studies.

Many of the key vehicle dependability problems and symptoms are consistent with the top problems identified in the 2013 China IQS, which measures problems customers experience during the first two to six months of ownership. Specifically, six of the top 10 problem symptoms in the 2013 China IQS also rank among the top problem symptoms in the 2013 China VDS, including excessive fuel consumption; brakes are noisy; excessive wind noise; engine loses power when air conditioning is turned on; abnormal engine noises; and air conditioner doesn’t get cold enough fast enough. 

The component replacement rate increases 5.6 percent year over year. The top three most frequently replaced components are exterior lights (5.5%); horns (4.2%); and interior lights (3.7%).  These components were also the most frequently replaced components in 2012.

“Reducing the number of component replacements is critical for automakers, because the increase of component replacement will direct the likelihood of customer-reported problems, and diminishes brand loyalty,” said Tony Zhou, director of automotive research at JD Power China.

Among owners who indicate that they did not experience any problems with their vehicle, 31 percent say they “definitely would” recommend their vehicle to family and friends, compared with only 19 percent among those who experience one and more than one problem.

The 2013 China Vehicle Dependability Study is based on evaluations from 17,883 owners of vehicles purchased between June 2010 and August 2011 and includes 161 models from 59 different brands. The study was fielded between June and September 2013 in 37 cities across China.

About JD Power Asia Pacific

JD Power Asia Pacific has offices in Tokyo, Singapore, Beijing, Shanghai and Bangkok that conduct customer satisfaction research and provide consulting services in the automotive, information technology and finance industries. Together, the five offices bring the language of customer satisfaction to consumers and businesses in China, Australia, India, Indonesia, Japan, Malaysia, Philippines, Taiwan, Thailand and Vietnam. Information regarding JD Power Asia Pacific and its products can be accessed through the Internet at www.jdpower.com. Media email contact: [email protected]. Please follow JD Power at http://e.weibo.com/jdpowerchina.

For inquiries about advertising/promotional rules, please contact:
Helen Rong; Marketing Communications; JD Power Asia Pacific; Shanghai, 200040 China; +86 21 2208 0832; [email protected]

About McGraw Hill Financial: www.mhfi.com

No advertising or other promotional use can be made of the information in this release without the express prior written consent of JD Power. www.jdpower.com/corporate.