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J.D. Power and Associates Reports: Shoppers Cite Dealer-Related Issues Among Top Reasons for Rejecting a New Vehicle



WESTLAKE VILLAGE, CA USA




WESTLAKE VILLAGE, Calif., Sept. 24 /PRNewswire/ -- A majority of
vehicles are rejected only after a new-vehicle shopper has visited a
dealership, according to the J.D. Power and Associates 2008 Escaped Shopper
Study(SM) released today.

The study, which analyzes the reasons why consumers consider a model
but ultimately purchase a different make or model, finds that 80 percent of
vehicles are rejected after a new-vehicle shopper has visited a dealership.
Three dealer-related issues are among the top reasons for not purchasing a
vehicle: another dealer has better service; limited availability of the
specific vehicle shoppers are looking for on dealer lots; and lack of
professionalism among personnel at the dealership.

"Given today's challenging automotive market, both sales and service
experiences at the dealership are particularly critical in the
decision-making process of shoppers," said Tom Gauer, senior director of
automotive retail research at J.D. Power and Associates. "Sales personnel
can play a key role in improving close rates by viewing customer visits as
an opportunity to demonstrate a vehicle's value and by successfully
matching shoppers with the new vehicle that best suits their needs."

The study also finds that an increasing number of shoppers have
considered buying an Asian brand -- 63 percent in 2008, up from 60 percent
in 2007. Conversely, the proportion of shoppers who considered buying a
domestic brand has decreased -- down to 55 percent in 2008 from 58 percent
in 2007. Shoppers who cross-shop among Asian and domestic brands are more
likely to purchase an Asian brand and most often cite retained value,
reliability and gas mileage as primary reasons for their choice. In
contrast, those customers who purchase a domestic brand instead of an Asian
brand most commonly cite a desire to "buy American" as their primary reason
for purchase, followed by rebates and incentives offered, and vehicle
price.

"As shoppers move away from larger-vehicle segments in growing numbers,
domestic manufacturers -- more so than Asian and European manufacturers --
must focus on rapidly aligning their U.S. product portfolios with this
shift in consumer preferences," said Gauer.

The percentage of shoppers who cite gas mileage as a reason for
rejecting a vehicle has increased in 2008-up to nearly 20 percent this year
from nearly 17 percent in 2007. Unsatisfactory gas mileage is the
third-most-common reason to reject a vehicle, with particularly high rates
of rejection in the large, midsize and compact utility vehicle segments.

Nearly 40 percent of all new-vehicle shoppers cite price as the most
influential reason for not purchasing a vehicle. Additionally, nearly
one-half of shoppers 40 years of age and younger reject vehicles based on
price- or finance-related issues. In contrast, only one in three shoppers
who are 60 years of age or older reject vehicles for the same reasons.

"Interestingly, nearly 40 percent of all shoppers who reject a vehicle
because of price say they can afford the vehicle, but don't believe the
vehicle is worth the price," said Gauer. "This presents an opportunity for
dealership personnel to focus on demonstrating the different features
contributing to the vehicle's total value to these shoppers, which can
eventually lead to increases in close rates."

The 2008 Escaped Shopper Study is based on responses from 29,903
new-vehicle buyers surveyed between May and July 2008.

SOURCE J.D. Power and Associates

mmarshall

Limited availability is often the manufacturer's fault, assuming the manufacturer has the capability to meet demand, but just doesn't want to, for example, when they build only a few thousand of certain models such as anniversary "specials" to guarantee "exclusivity".

As far as "professionalism" is concerned, yes, I can see where it would affect some potential buyers, but, first, much of what is given to customers at dealerships (and I know) is not professionalism per se, but carefully worded double-talk designed to present their product in the best possible light, downplaying or ignoring its weaknesses (In my auto reviews, for instance, I list both strengths and weaknesses, as I see them, one by one...you won't hear that at a typical dealership).

Second, at a dealership, no matter what kind of smooth, sales-lingo the reps give you, in the end, one is buying a vehicle, not the guy hawking it. Bill Clinton and his classic smooth talk could be trying to sell you the car, but it is the car you are going to have to live with every day after you buy it, not the sales guy.

So, in short, I don't see pushy, slick, or ignorant salespeople as a credible reason to reject a car, if it is the ideal vehicle for you. If one does adequate research before he/she goes to the dealership (and those of here on CAR CHAT are always ready to help in that regard) he or she will have a pretty good idea of what they want (and need) before they actually get to the sales level.

Again, this is not surprising. In most cases, the older you are, the longer you will have had to save up over the years for your dream car and can afford it without financing (if, of course, you still want that same car and haven't changed your mind in the meantime and want something else).

doug_999

The wife's cousin was treated poorly at a Toyota dealership (tried to scam her). She refuses to ever buy a Toyota again. Fair? No way. Wise choice? probably not. BUT, she is a very smart person and if she feels that way towards a manufacturer after being mistreated at a privately owned dealership, then others do as well. Remember, most people do not make a distinction between the dealer and the actual car company - they are one in the same to them.

Someday when we get some better laws in this country and the dealerships can actually be owned by the car companies, I bet we will see things change. But until then....

mmarshall

No personal offense to your wife's cousin, but if she is that smart, then why does she not see the difference between manufacturers and privately-owned dealerships? But, in her defense, sometimes that actually is the case. Companies can sometimes be as arrogant as the dealerships that sell their products......Honda, for example, was that way, especially in the 1980's and early 90's, until they sarted getting some real competition. So was BMW and Mercedes.



BTW, I agree with you that, while there ARE some good and honest dealerships, in general, having manufacturer-owned and operated retail outlets would be a good idea. Saturn, so far, while still some ways from that ideal, has been the closest we've seen to that concept....and, not surprisingly, one of the best in customer/dealer satisfation.

doug_999

My point is, that many people (including well educated people) link the two together. Their thought is "If Toyota allows crooks like this to keep a dealership, then why would I want to buy a Toyota?"

PS Honda dealers were just arrogant back in the 80s because they had a product that everyone wanted...

PPS - and remember of the mfgs discussed here, Toyota has the lowest sales satisfaction ranking...

Threxx

I believe it. My BMW has been in for warranty work for exactly 3 things that were the car's fault. 2 of them were fairly minor annoyances but things I didn't want to live with none the less.

The additional 6 other times I've been to the dealership involved follow up issues that were caused by something the dealer did trying to fix the original issue or because the issue wasn't fixed the first time.

In other words a lack of dealer effectiveness has TRIPLED the number of times I've had to come in. 9 times in a 11 months of ownership is pretty pathetic.

doug_999

OT - Oh there are some BAD BMW dealers/techs out there. Had a friend where the BMW fixed his active steering. Once replaced, it was one turn to the left or three turns to the right. Dealer said this was normal.

GET a new dealer. There are competent ones and as you have seen, incompetent ones. If you ever need a list of the incompetent BMW and/or Lexus dealers here in the Chicagoland area, just let me know. I've got some winners.

LexFather

I've shared my experiences here as I've been to every Lexus dealer in GA except one.

I stick to the Hennessy franchise and the Gwinnett dealership in particular. They are head and shoulders above the rest.

When I had issues with other dealers, I didn't want to leave the brand, I had other dealer options. Now if you are in a smaller town, that could be a problem and you might just tell the entire band FU.

I don't understand why people don't try to create relationships with dealerships more.

nabbun

I don't know about this whole thing about I won't buy this car because I don't like the dealer crap. Unless it's the only dealer in your 50 mile radius then I can understand BUT, most people buy a car because that's the one they like for what they can afford or willing to pay for. It doesn't even matter if it works for them ergonomically or economically. most people have been buying cars with they're feelings and what they like (styling, power, brand prestige, color, etc etc). Cars are relatively cheap compared to other countries who tax imports like a **** so cars are more like fashion statements (what people drive says a lot about them. just like the way they dress.) I, for one, research the different models available to me, shop around from dealer to dealer to actually sit and test drive to compare, then i strike up a deal at the dealership i'm most comfortable with.

since i'm young (23) most salesmen don't treat me right and tell me to "go and get daddy and we'll talk numbers" so I give them the big F U and walk out.

I don't have time to sit down with them or their a-hole managers.

toy4two

sell direct to the public, sell more cars. cut out the middlemen, save consumers money, make more profits. WHY do we need these bottom feeders in our society anymore?

Lexmex

One strange issue I used to have when I helped friends in Mexico City go to a dealer was parking. In many dealerships (especially high end ones), they wanted you to valet park your own vehicle upon which they'd rummage through the car registration in the glove compartment to check year, etc., for a potential trade-in. This is one reason I usually drove my Lexus over there with them (rummage all you want). Toyota, I am happy to say, didn't do this and were quite the professionals. I remember one salesman in particular at a dealer not too far from my 1/4 mile track who actually was quite successful in selling Toyotas as he studied up on strengths/weaknesses of competitors and would even talk about the weaknesses of his own vehicles and those of the competition. His thinking was that once you put out strengths/weaknesses in someone's mind (keep in mind this was Mexico and they don't have all the tools we have in terms of checking quality, etc that we have in the U.S.), they're less likely to look them up. And he also truly believed he was selling the best quality products in the market.