Car sales began to explode this year, but there are many challenges — mostly lack of inventory due to a shortage of chips used in cars. Despite the challenges, satisfaction with the sales experience at the dealership is unchanged from last year, according to J.D. Power. Not all dealers perform well, however, and the brand with the worst dealers in America is Genesis.
After the COVID-19 pandemic closed many dealers, there was pent-up demand for new cars. Another reason demand is strong may be the wide variety of new autos with advanced features run by software that offer drivers a new level of safety. Finally, more and more Americans want electric cars in a time when large car companies have just started to release them.
Unfortunately for manufacturers, consumers, and dealers, cars are in short supply due to an extreme shortage of the chips used in the electronic systems that control many vehicle functions.
One measure of car demand is the dealer yardstick of “days on the lot,” which is the period from when a car reaches the dealer until the time it is sold. Typically, this is between 50 and 60 days. That has dropped to less than 30 in some places. Some cars are so scarce that the number of days they are on the lot can be measured in single digits. These are the fastest-selling cars in America right now.
Dealers have always been critical to car sales. Those with the best sales and service practices tend to get repeat customers. Those that do poorly drive away potential repeat customers. Manufacturers rely on dealerships to be their face to the consumers, which in turn affects their reputations.
Widely regarded car research firm J.D. Power has just released its “2021 Sales Satisfaction Index (SSI) Study.” The study measures satisfaction with the sales experience of customers who decided to buy a car at a dealership and those who decided to buy somewhere else (rejecters).
One primary reason people were satisfied was that they got more money for their trade-ins than expected. This comes as no surprise. The lack of supply of new cars has driven the price of used cars higher.
Commenting on the trends, Chris Sutton, vice president of automotive retail at J.D. Power, said that as long as there is no end to the supply chain problems, dealerships should continue selling the vehicles they can offer and help customers as much as possible. He added, “the silver lining for customers is that trade-in values remain high and this has had a positive effect on customer sales satisfaction.”
The study, conducted from July through September, is based on a poll of 35,387 buyers who bought or leased a car between March and May 2021. Final scores were based on six weighted factors: delivery process (28%); dealer personnel (21%); working out the deal (19%); paperwork completion (19%); dealership facility (10%); and dealership website (4%). Rejecter satisfaction is based on five factors: salesperson (40%); price (23%); facility (15%); variety of inventory (12%); and negotiation (10%).
Car brands were divided into “premium” and “mass market” categories. The average scores (out of 1,000) for these categories were 807 and 785, respectively.
The brand with the lowest score was Genesis, part of the premium car list. Its score was only 738, by far the worst brand measured.
Genesis is the luxury car brand of Hyundai. It was spun out as its own brand in 2015. Today, Hyundai management must rue the decision. (These are cars Americans don’t want to buy.)
Click here to see the car brand that has the worst dealers in America
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