Škoda Ranks Highest in India Sales Satisfaction Study

New-Vehicle Buyers Prefer Value-Added Offers Over Cash Discounts

SINGAPORE.— Škoda ranks highest in overall sales satisfaction for the first time in four years, according to the J.D. Power Asia Pacific 2007 India Sales Satisfaction Index StudySM released today.

Sales satisfaction is based on six factors: delivery process, delivery timing, salesperson, dealer facility, paperwork and deal. Škoda performs particularly well in three factors: delivery process, delivery timing and paperwork. Maruti Suzuki and Mahindra follow Skoda in the rankings, respectively.

Recording a single-point increase over 2006, the overall satisfaction in the industry remains static. Six of the nine nameplates ranked in the study record improvements compared to 2006, with Ford and Toyota posting the highest improvement since 2006.

The study finds a change in financing patterns since 2006. While more customers report receiving cash discounts, fewer customers are taking loans to purchase their cars.

Sixty percent of customers report receiving a cash discount in 2007. When comparing cash discounts with two value-added offers—free accessories and free extended warranty—customers report greatest satisfaction when they receive a free extended warranty, either in combination with a cash discount or with free accessories. Satisfaction is highest when an extended warranty is combined with a cash discount. Satisfaction falls marginally when an extended warranty is combined with free accessories in lieu of a cash discount.

“Extended warranty is not only beneficial to the customer but also helps the automaker ensure that the customer is retained within the network for post-warranty service,” said Mohit Arora, senior director at J.D. Power Asia Pacific. “Given the fact that the average consumer replacement cycle is approximately five years in India, provision of extended warranty is not only a source of additional service revenues, but also helps the dealership to influence the customer’s next vehicle purchase.”

Additionally, the study finds that the percentage of customers who took out a loan to finance their new vehicle decreased to approximately 80 percent in 2007 from nearly 90 percent in 2006.

“Increasing interest rates in the Indian market and differing manufacturer retail policies may partially explain this decrease in new-vehicle buyers seeking loans,” said Arora. “While regional differences exist, we see a greater propensity for customers to purchase their vehicles with cash, particularly in the small car segment.”

The study also finds that customers who financed their vehicles from nationalized banks report greater satisfaction with the entire experience, compared with those who financed from multi-national banks and other private sources.

The study, now in its eighth year, examines satisfaction of new-vehicle buyers with the sales and delivery experience at two to six months of ownership. The 2007 study is based on responses from 5,083 owners of 40 different vehicle models, and the study was fielded from March 2007 to June 2007.