Car Dealers Losing Sales for Manufacturers

Car and truck buyers unhappy with their treatment by salesmen are as likely to go off and buy an entirely different make and model as they are to find a better dealer for the same vehicle, according to new research in the US by J.D.Power and Associates. Customer satisfaction with new purchases as a whole is up but this is due to stock levels and low interest deals rather than any improvement in sales processes.

More than a quarter of the people who walked out of a new-vehicle dealership without buying cited as the main reason the way the salesperson handled their business, according to the 2003 Sales Satisfaction Index (SSI) StudySM released last week.

Overall customer satisfaction with the new-vehicle sales process has improved slightly over 2002, the two main reasons being the expanded use of lower interest loans for longer terms and a significant decline in complaints about lack of vehicle availability from dealers.

'While satisfaction scores have improved overall, the study finds relatively little evidence that dealers as a whole have improved the actual processes with which they interact with customers', said Chris Denove, partner at J.D. Power and Associates, adding that 'Dealers and manufacturers are sometimes under the false impression that customers are truly committed to a certain model'.

Buyers who took out a traditional loan paid lower interest rates (averaging 4.8 percent in 2003 vs. 5.5 percent in 2002) and financed their vehicle for a longer term (58 months in 2003 vs. 55 months in 2002). As a result, the average monthly vehicle loan payment in 2003 is $427, down from $441 in 2002. 'Financing options are better than ever, with nearly one in 10 loans paying zero-percent interest, and more than one-half paying a below-market interest rate subsidized by the manufacturer' according to Chris Denove.

Denove also says that dealers have more vehicles in stock this year which means that 'Buyers are less likely to have to compromise on options or color... Generally customers are facing a win-win situation when shopping for a new vehicle this year'.

Top of the sales satisfaction league this year is Cadillac, which has improved eight index points over 2002. The US manufacturer performs consistently well across all measures of satisfaction including the dealership facility, working with the salesperson, paperwork/financing process, delivery process and vehicle price.

The 2003 Sales Satisfaction Index Study is based on more than 40,000 responses from buyers and lessees of new 2002 and 2003 model cars and light trucks. Responses were collected in April and May 2003 and the survey provides a comprehensive analysis of the new-vehicle purchase experience.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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