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Study Shows German Premium Buyers Expect 5 Hour Test Drive Before Buying
Vehicle shoppers have specific expectations of time and information for each step of the shopping process, which when not met, can result in lost sales, according to the 2007 Consumer Report – The Car Market From a Customer Point of View, released today by J.D. Power and Associates in association with AutoScout24.
The report, which examines the German car market from a consumer’s perspective, finds that vehicle shoppers are willing to spend an average of one hour in the dealership collecting information on products and financing, but have specific information and treatment expectations that need to be met by dealers.
While vehicle shoppers have many expectations when they step into a dealership, the report finds two that are particularly critical. First, vehicle shoppers expect to begin working with a salesperson within 10 minutes of the initial greeting. Additionally, shoppers expect to be offered a discount during the negotiation process. The report finds that failure to offer a discount results in a lost sale in more than 80 percent of negotiations.
When it comes to the test drive, most shoppers expect to be able to test drive the vehicle for an hour or more, with most premium brand shoppers expecting to test vehicles for five hours or more. Most shoppers also expect to be able to take the test drive on their own, without the salesperson accompanying them.
Vehicle delivery is another area where unmet expectations could result in lost sales. While there are exceptions for some vehicle models, customers are generally willing to wait six to eight weeks for delivery of their new vehicle. Most customers lose patience if they have to wait 10 weeks or more. Overall premium customers tend to accept longer delivery times for their ordered car than customers shopping in the volume segment.
“Automakers spend millions of euros every year developing new products, that the sales processes can put at risk due to insufficient understanding of customer expectations,” said J.D. Power IV, senior vice president and general manager of international operations at J.D. Power and Associates. “Yet, a clearer understanding of what customers expect is required for dealers and automakers to optimize the sales experience.”
With the number of new models available in Germany up 30 percent since 2003, and forecasted by J.D. Power and Associates to increase another 16 percent during the next five years, customers will be able to choose from more than 320 models in the near future when looking for a car. The shopping process and multitude of choices pose risks to customer satisfaction for dealers and automakers.
The report details the continuing importance of online information in the vehicle shopping experience. Nearly two-thirds (65%) of used-vehicle shoppers in the report state that Internet search platforms like AutoScout24 are the most important source for their information collection. Among new-vehicle shoppers, 62 percent said that the auto manufacturers’ Web pages were most critical in their information search.
“Very quickly the Internet has developed into a new and successful sales channel, especially for used cars and, with growing importance, new cars are searched and found online,” said Dr. Nicola Carbonari, CEO of AutoScout24.
Nearly 50 percent of vehicle shoppers cite brand as the most important search criteria when looking for a car on the Internet. In particular, customers shopping in the premium segment begin their search focusing on brands of their interest, while in the non-premium segment, price is becoming an increasingly important search criteria.
“Understanding and delivering on the expectations of vehicle shoppers is critical to reducing risks of lost sales and increasing advocacy and profits,” said Power. “We believe the retail experience should be a competitive advantage for automakers and dealers. Better knowledge of customer expectations is key to creating this advantage and fully realizing its potential.”
The Consumer Report is the first of several reports between AutoScout24 and J.D. Power and Associates planned for the German market to provide a detailed understanding of what customers expect during the ownership period. The report data, along with the J.D. Power and Associates Germany Customer Satisfaction Index Study, which looks at ownership satisfaction with two year-old-vehicles, will be utilized by J.D. Power and Associates to begin certifying dealerships based on their ability to meet customer expectations in the sales and service experiences.
For this report J.D. Power and Associates surveyed 3,323 online shoppers between August 13 and 23 2007 looking for a new or used car on the AutoScout24 online platform. More detailed results as well as print material are available under presse@autoscout24.de.