Japan's car brands face China challenge

1 August 2013
SHANGHAI: Japanese car brands declined more than any other foreign carmaker in a new survey of Chinese customer satisfaction, with recent political tensions between the two countries a potential contributing factor to these results.

The China Customer Service Index Study, compiled by research firm JD Power Asia Pacific, a division of McGraw-Hill Financial, examined attitudes towards after-sales service at authorised dealerships and found that only Korean car brands improved its customer satisfaction ratings.

All other foreign brands, as well as Chinese domestic vehicles, lost ground. But Japanese brands suffered the steepest decline overall.

The JD Power Asia Pacific research measures national scores across all of that nation's car brands. A lower overall score for a nation therefore does not mean that all of that nation's brands' scores fell.

Tony Khou, director of automotive research at JD Power China, told Bloomberg that the decline of Japanese brands was driven mainly by political reasons, which undermined their reputation.

"Consumers also complained about aggressive push by Japanese dealerships, which are under pressure to generate profit amid rising competition, to make them spend more money," he added.

Relations between China and Japan have been strained over the last year due to the ongoing dispute over a chain of islands in the East China Sea, known as the Senkaku islands in Japan and the Diaoyu islands in China.

The survey, which used a 1,000-point scale to assess five areas of dealer service, found that Japanese brands declined 31 points to 831 compared with 860 in 2012. European brands fell 17 points to 832, US brands dropped just one point to 851 while Chinese brands declined by 31 points to 751.

Korean brands achieved a year-on-year increase of 13 points to 874. Overall satisfaction with after-sales service fell 17 points to 815.

Another factor behind the decline in satisfaction with European and Japanese brands cited by the report was a significant increase in customer expectations among Chinese consumers.

Among other findings, Audi was ranked first among luxury brands, with BMW ranked second and Cadillac third. In the mass market category, Dongfeng Peugeot topped the survey with 882 points, followed by Guangqi Honda and Dongfeng Citroën.

Zhou said: "The competitive landscape continues to be aggressive, driven by product proliferation and rising customer expectations, making it imperative for manufacturers and dealerships alike to develop points of differentiation on delivering a superior customer experience in after-sales services."

Data sourced from Bloomberg, JD Power Asia Pacific; additional content by Warc staff
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