Exclusive: Hyundai ranks highest for sales satisfaction

THE long-dominant Japanese mass-market automotive brands are facing a major threat from South Korea and other countries when it comes to winning the hearts and minds of Australian new-vehicle buyers, with the latest JD Power study into customer sales satisfaction placing Hyundai at the top of the industry – and Kia close behind.

The results of the 2017 JD Power Australia Sales Satisfaction Index (SSI) study released today will be closely scrutinised in company headquarters and dealerships throughout the Australian motor industry, particularly with Mazda falling from first position in last year’s inaugural study to seventh this year – to below the industry average – while Holden and Ford have both moved ahead to sit behind the two major Korean brands.

With Toyota completing the shutdown of its Australian manufacturing facilities next Tuesday, October 3, and GM Holden following suit on October 20, the Australian new-car industry is now, more than ever before, operating on a relatively level playing field – albeit one that has never been more intense and competitive.

While JD Power’s separate Customer Service Index (CSI) study measures buyer satisfaction with aftersales service, the SSI report acts as an important independent barometer of the major car companies’ performance at the front end of the dealership – the showroom.

This is an obviously critical area of the business when the treatment of a prospective buyer is paramount to not only an immediate sale but long-term loyalty and advocacy of the brand.

As such, JD Power calculates the level of customer satisfaction with the purchasing process on a 1000-point scale, based on six factors: salesperson (19 per cent), the deal (18 per cent), delivery timing (17 per cent), delivery process (17 per cent), dealer facility (16 per cent) and sales initiation (14 per cent).

At the top of the table, Hyundai’s 827 points marks a slight dip on last year’s result (832) but it still turned in a best-in-class performance in four of the six categories, while JD Power has advised that Kia has improved markedly after not being ranked in 2016 due to an insufficient sample size.

Above all, the performance of both South Korean brands reflects their growing reputation and standing among an ever-increasing ownership base in Australia, and confirming each company’s own internal metrics for measuring customer service levels that have shown significant improvements.

A combination of ultra-competitive deals in the marketplace and attractive new models have certainly enticed customers into showrooms, but each brand’s respective efforts in handling those buyers with a high level of professionalism and care is now apparent.

By the same token, Holden and Ford, while having mixed fortunes in terms of outright sales, are likewise working overtime – and investing heavily in various customer service initiatives – to improve their standing among private new-vehicle buyers, which is particularly important with their transition to full-line importers.

With best-afield results in two categories (‘the deal’ and dealer facility), Holden moved its SSI ranking from equal seventh to outright third this year – its 823 points represents an 11-point improvement over 2016 – while Ford (821) has climbed six points and moved up one position to be fourth.

In contrast, Mazda, which is second only to Toyota and holding firm ahead of Hyundai in terms of sales volume in Australia, has dropped 27 points to 813 on the SSI scale – enough for only seventh place – while Honda has fallen 23 points (to 809) and moves from second place last year to ninth.

Toyota and Mitsubishi are the only two Japanese brands above the industry average of 816 points – both are sitting on 817 points for equal fifth, with Toyota falling eight points and slipping a rung in position terms, while Mitsubishi has climbed seven points and has shot up from equal seventh (with Holden) last year.

Subaru (811) now sits in eighth, and Nissan (800) in 10th, and while both brands recorded extremely positive results this year of +20 and +16 points respectively, they still place below the industry average.

Volkswagen (791) was the other surprise result, falling 22 points and from sixth position last year to now sit at the bottom of the table.

JD Power senior country manager (Australia) Loi Truong told GoAuto that the increasingly competitive marketplace – underlined by strong demand for SUVs – was bringing unprecedented numbers of prospective buyers into new-car dealerships, but that pressure tactics were clearly being employed to secure a deal.

In relation to why Mazda has fallen significantly in this year’s study, he said: “The data shows that Australians are still very keen with SUVs and the growth is still strong. But it appears that customers are being pressured more to purchase, and my gut feel is that as Mazda continues to perform well the network is under pressure to sell more and in turn putting unwanted pressure on their customers.”

Mr Truong pointed to the fact that Mazda buyers have extremely high expectations of the brand, which then puts the onus on dealers to perform at the highest levels in terms of customer service.

Yet the latest SSI results indicate Mazda dealers are falling down in key areas, particularly with customers who have turned up with the intention of purchasing one of its high-volume SUVs (CX-3, CX-5 and CX-9).

Delivery times for Mazda SUVs, for example, are higher than the industry average – 15 days compared to 12 – while 24 per cent of Mazda SUV buyers said the delivery time was worse than expected, compared to just 13 per cent across the industry.

The high consistency of Mazda dealer performance across the network has also come back to the field, according to the study, with the implementation of JD Power’s 20-22 sales standards dropping from 46 per cent last year to 35 per cent in 2017.

This comes down to a variety of factors, but the performance of the salesperson is clearly at the heart of the issue.

The report shows Mazda customers are experiencing higher levels of pressure in the showroom, with 12 per cent being asked (or made) to pay a higher down payment than expected at the time of purchase – up from three per cent last year – and 16 per cent feeling pressured to purchase on the same day – up from nine per cent a year ago.

Mr Truong said that Australia’s transition to a full-import car market was turning into a battlefield to win customers with SUVs, but he stressed that “customers’ needs should not suffer as a result”.

“Understanding changing customer expectations, keeping customers updated pre- and post-sales, as well as delivering consistent customer experiences across the network are key to ensuring an elevated sales experience and can, ultimately, go a long way toward securing customer retention,” he said.

The 2017 SSI study is based on responses from 2779 new-vehicle owners who purchased their vehicle/s between June 2016 and June 2017. The study was fielded from late January through to June this year.

Isuzu Ute, Jeep, and Suzuki were included in the study but not ranked due to small or insufficient sample size, while luxury brands will this year be the subject of a separate report.