JD Power reveals new car buying patterns in India

  • Oct 1, 2014
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Maruti Suzuki is the most considered nameplate among first-time new car shoppers in India for the 10th consecutive year

Maruti Suzuki Swift Dzire

Global marketing information services firm, JD Power, has surveyed 8,499 first-time new car buyers and 3,448 rejecters of new cars and utility vehicles in India. The study decodes the sentiments of first-time new car buyers who purchased their vehicle between September 2013 and April 2014. The survey which is now in its 14th year, examines reasons why new-vehicle shoppers consider, but ultimately reject certain models in favour of another. The study was fielded between March and August 2014. According to the survey findings Maruti has scored highest points and has emerged triumphant. The study reveals that Maruti Suzuki is the most considered nameplate among new-vehicle shoppers for the 10th consecutive year, with 41 per cent of all shoppers eventually purchasing one of its models.  

The study has also examined the reasons why new vehicle shoppers consider, but ultimately reject certain car models in favour of another. The study has revealed that 27 per cent of first-time new-vehicle buyers in India seriously considered a model other than the one they purchased while shopping in 2014 as opposed to 20 per cent in 2012. One of the key aspects driving the increase in cross-shopping is the proportion of first-time new-vehicle buyers who finance their purchase through a car loan. Nearly 73 per cent of first-time buyers finance their vehicle in 2014, up from 64 per cent in 2012.

The findings reveal that buyers who finance their vehicle tend to cross-shop more than those who do not opt for financing. Thirty per cent of buyers who finance their vehicle also consider other vehicles, while only 25 per cent of those who pay cash for their vehicle cross-shop. The study also found that 35 per cent first-time vehicle buyers have a monthly household income of Rs 50,000 or more in 2014, which marks an 18 per cent increase when compared with that in 2012. This increase in the monthly income enhances their credit worthiness and enables them to qualify for a higher loan amount.

The study also reveals that new-vehicle shoppers are increasingly placing greater importance on a vehicle’s interior in their selection process. The findings state that among shoppers, 15 per cent indicate the vehicle interior is the primary reason they rejected a vehicle in 2014, an increase from four percent in 2012. Issues such as interior styling, driver’s seat and rear-seat comfort are among the top interior-related reasons cited for rejecting a vehicle.

The study also states that 35 per cent new car buyers have indicated that they researched the vehicle they purchased before visiting the dealership in 2014, up from 26 per cent in 2012. Among buyers of newly launched models, 45 per cent have indicated that they researched their vehicle in 2014, compared with only 24 per cent in 2012.  

The findings have also revealed that customer retention has dropped to 38 per cent in 2014, as opposed to 40 per cent in 2013. Car brands such as Ford, Honda and Hyundai have improved their customer retention rates the most year over year. 

The study also reveals that new-vehicle buyers who purchase Volkswagen, Ford and Renault car models shop the most before purchasing their vehicle, while buyers of Mahindra, Maruti Suzuki, Tata and Toyota models shop the least often before purchasing.

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