The Hindu Business Line : Upgraders drive Indian auto industry: JD Power

Overall views
Customers clearly express their resentment with higher price paid.
Maruti Suzuki has highest percentage of prior 2-wheeler owners.

MARUTI 800

New Delhi , Aug 23

The Indian auto industry is increasingly being driven by upgraders to new cars rather than first time buyers. According to a study, nearly two-thirds of all new car purchases were by people who already owned a car, while one fourth of them previously owned two-wheelers.

Upgrade Behaviour

The JD Power Asia Pacific 2006 India Sales Satisfaction Study, which for the first time analysed the upgrade behaviour in the Indian auto industry, said that car market leader Maruti Suzuki has the highest percentage of prior two-wheeler owners, while Skoda has the fewest.

"Prior owners of two-wheelers overwhelmingly purchase small cars as a practical alternative," the JD Power Asia Pacific Director, Mr Mohit Arora, said.

Satisfaction Issues

The study further pointed that while the domestic auto industry made improvements across all factors, customer satisfaction over buys continued to be an issue, as there was a close correlation between price paid and buyer perception of the deal they received.

"Buyers are paying anywhere between 6 to 12 per cent more on an average, across all segments for their new vehicle compared to 2005. This is over and above a similar increase seen in 2005," it said.

"The higher price paid across segments is a result of two factors, namely new-model launches and price increases for existing models," Mr Arora said.

"Nevertheless, customers are clearly expressing their resentment with the higher price paid, as customer satisfaction with the deal they received has dropped."

In terms of overall sales satisfaction, the Indian auto industry had made an improvement over the last year, even as car market leader Maruti Suzuki topped for the third consecutive year, the study said.

With 795 points on the index against an industry average of 772, Maruti outperformed other car makers on all six factors contributing to the overall sales satisfaction index — delivery process, delivery timing, salesperson, dealer facility, paperwork and deal — it said.

Czech carmaker Skoda came second, while Korean auto major Hyundai was third in the list.

"While the performance of Maruti Suzuki continues to impress, it is encouraging to note the improvements made by other players in the industry," Mr Arora said.

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