On March 15, China's Customer Day, top technicians from around Zhejiang province came to Hangzhou to help repair a car. Quality service is increasingly important in the maturing market. Shi Jianxue / For China Daily

Amid torrid competition, perceptions are crucial

With competition in China's passenger vehicle market ever-more fierce, improving the customer experience and communicating the right message are core strategies for both domestic and international automakers, said an industry expert.

Geoff Broderick, vice-president of market research company JD Power Asia Pacific, told China Daily that the goal of a dealership should not be just a single sale, but a "lifetime sale" that starts with building the trust and loyalty of customers.

JD Power research shows that high-satisfaction dealerships win more recommendations, purchase intent and revenue, he noted.

He added that a dealership should offer "an experience customers expect from the brand".

"If you go to a luxury brand, the service experience expectation is different from that if you go to a mass-market car," he explained.

He said "like a honeymoon", delivering a new car to the customer is the most important aspect of the sales experience, but "when you get back from the honeymoon, don't wave goodbye to the customer and not talk to them for months".

"When the customer drives the car away, dealers should stay in frequent contacts, reminding them about service and getting them back to the store," he said.

"The more you can get customers back into the store, the better you can build the relationship and better chance of selling them another car.

"Even in a growing market like China, many car dealerships are losing money," he said. "Part of the reason is that they have been too reliant on new car sales, and profits from new car sales are declining as the prices fall" in the competitive market.

There are around 100 car brands available to Chinese customers, almost double the number in the United States, said Broderick.

And the competition is not just on the showroom floor - there is also competition on the Internet to provide brand information.

JD Power projects sales will grow nearly 13 percent to 18.9 million units in China's passenger vehicle market this year. The number is projected to reach 27.3 million by 2020.

Broderick said growth will slow as the market continues to mature.

He noted that Chinese automakers have made "tremendous progress over the past decade", closing the quality gap between international brands. But their biggest challenge is to change the mindset of customers.

"While they may have quality, safety and performance similar to global brands, what they don't have yet is the perception from the consumers that they have these things," he explained.

"Chinese manufacturers may have to spend a great deal of time convincing Chinese consumers that their vehicles are good and they should be proud to have their vehicles."

zhangzhao@chinadaily.com

(China Daily 04/20/2014 page41)