According to a study by Claritas UK, car manufacturers are enjoying a high level of customer loyalty in the UK. The research, which looks at the latest automotive purchasing trends and influences, predicts growth for the industry despite the current stagnation of the European car market.
According to Claritas, UK sales of September’s new registrations are tipped to surpass the existing record of 1993.
Over the past 12 months, the car market has seen its fair share of upheaval and turbulence. The Consumers’ Association’s “Great British Rip Off” campaign has also attracted media attention about inflated car prices in the UK. In addition, the uncertainty over the future of block exemption will provide an open and level playing field for all car retailers and help the industry become more competitive and customer focused.
Claritas says that because of increased competition, consumers will shop around more in a bid to get the best deal. New sales’ channels such as the Internet, and opportunities to buy overseas, have already started to have an im
pact on the traditional market. But the question remains whether increased competition will generate a more promiscuous and an increasingly demanding car-buying public. Manufacturers will not only have to keep more of a watchful eye on their profit margins but also on their customer base.
When looking into future purchasing intentions, the research highlights the willingness of consumers to buy a car from their existing manufacturer. Skoda has an impressive lead here, with a staggering 92 per cent of its customers intending to buy back into the brand at replacement. German manufacturers fill second and third places, with impressive results for Mercedes-Benz and BMW with 80 per cent, followed by Toyota with 79 per cent.
At the other end of the scale is Fiat, with the lowest level of repeat purchases at 52 per cent. Fiat’s “brand renaissance” launches next month – the £8.9bn drive aims to rebuild market share and reverse the decline in profit. It and the launch of Fiat’s Stilo model are both anxiously awaited by customers.
CitroÃÂ«and Rover fare little better, with 53 per cent of drivers saying that they would stay loyal to the brand next time around.
Claritas believes that loyalty is closely linked to satisfaction. Skoda now enjoys a good reputation for reliability, and the report says that 80 per cent of its customers are “very satisfied”. The same is true for Mercedes-Benz and Toyota, which take equal first place with Skoda.
The manufacturers with the lowest proportion of “very satisfied” customers are Fiat and Ford with 57 per cent. And, only just in front is Rover with 59 per cent and CitroÃÂ«with 61 per cent.
What is more relevant are the levels of customer dissatisfaction. With car manufacturers investing more heavily in customer service and relationship management, the report brings welcome news. Less than five per cent of consumers say that they were either “dissatisfied” or “very dissatisfied” with their cars. Fiat, Ford and Rover have the highest number of unhappy customers, with four per cent of drivers dissatisfied. It is a pattern that reflects much of the earlier findings in this report. Conversely, BMW, Honda, Proton, Skoda and Toyota customers, have little or nothing to say in the way of dissatisfaction with less than two per cent saying that they are unhappy with their car.
So what is it that consumers look for in a new car – price, safety, environmentally friendly engineering?
The survey identifies the distinct buying influences that are important to each brand customer. When it comes to performance, Audi and BMW (increasingly direct competitors) are front runners, followed closely by Hyundai and Toyota. By comparison Skoda sits alone, with a majority of its drivers noticeably disinterested in the car’s performance. Perhaps unsurprisingly, BMW customers are the least interested in the impact of their car on the environment. Nissan and Proton drivers lead the way in their interest of their car’s impact on the environment, although no single customer group scored very highly in this criterion.
Reliability is an issue for all consumers. Seat drivers are most influenced by a “starts every time” promise, as are Audi and Mazda customers, but interestingly Mercedes-Benz drivers are least interested in this proposition – although Claritas suspects that these drivers take reliability for granted.
The research concludes that the economic slowdown, which is usually felt in this industry first, has yet to have any real impact. And manufacturers and dealers alike are seemingly benefiting from their price-cutting policies of the past 12 months, with private car sales seeing a significant rise. Right now the market looks more buoyant than it has for some time – clear evidence perhaps that the manufacturers are at last employing sales and service tactics that consumers have long been waiting for.
Factfile is edited by Sonoo Singh. Alex Lewis, associate director at MORI Financial Services, contributed