Connect with us

Hi, what are you looking for?

CleanTechnica
Photo by Paul Fosse/CleanTechnica.

Cars

J.D. Power: Lack of New-Vehicle Inventory Decreased Sales Satisfaction in 2022

For more than 37 years, J.D. Power has been delivering yearly consumer satisfaction reports based on consumer insights, advisory services, data, and analytics. The recently released J.D. Power 2022 U.S. Sales Satisfaction Index (SSI) Study shows that customer satisfaction with the vehicle purchase experience has declined for the first time in more than 10 years. The 2022 study shows that overall sales satisfaction has dipped to 786 (on a 1,000-point scale) from 789 in 2021.

The results are not really surprising considering that new-vehicle inventory remains very low and transaction prices have significantly increased — and consumers are not happy about it. New-vehicle production took a huge hit due to the pandemic and manufacturers are still trying to play catch up in a post-pandemic world.

In 2021, new-vehicle prices increased, and consumer satisfaction was offset by higher-than-expected trade-in values. But in 2022, new-vehicle inventories declined further, enabling a higher-rate of dealers to charge more than the Manufacturer’s Suggested Retail Price (MSRP). This caused the satisfaction index score for fairness of price paid to decline and the variety of physical and online inventory plummeted in each of the past three years.

“Even in the face of a continuing shortage of new-vehicle inventory and general inflationary pressure, dealerships have been able to maintain a consistent level of sales satisfaction,” said Chris Sutton, vice president of automotive retail at J.D. Power. “With the supply chain being an ongoing issue and with no near-term solution, dealerships have had to use additional tools at their disposal, such as special orders and more personal customer handling, to maintain sales satisfaction. However, when dealers charge more than MSRP, particularly with long-term loyal customers, they risk a potential long-term negative effect on customer advocacy and service business.”

Another important finding of the study is that electric vehicle (EV) buyers continue to have less satisfying sales experiences than buyers of gas-powered vehicles in both the premium and mass-market segments. One example of this was the satisfaction among owners of mass-market battery electric vehicles (BEVs) is 56 points lower than among owners of gas-powered vehicles (791 vs. 847). Also, satisfaction among owners of premium BEVs is 33 points lower than among owners of gas-powered vehicles (831 vs. 864).

“If EVs are going to be the wave of the future, rapid improvements need to be made to close the gaps in factors such as product knowledge and vehicle delivery,” Sutton said. “There is no doubt that the products are coming, but from a customer purchase experience standpoint, the dealerships are just not there yet.”

In the J.D. Power 2022 study, there were four key findings that need to be addressed in order to improve overall consumer satisfaction. The four areas that would help increase consumer satisfaction were sticker prices, special orders, EV instruction, and digital retailing.

The sticker price for new vehicles contributed to buyers’ dissatisfaction since many dealers were prompted to charge more than the suggested price for new vehicles — the practice has had a negative effect on overall satisfaction. Satisfaction among buyers who paid more than the sticker price is 757, while satisfaction among those who paid the sticker price is 850. Another interesting find: 25% of mass-market vehicle buyers paid more than MSRP while just 19% of premium vehicle buyers did so.

Special orders increased the satisfaction level of consumers over those who purchased at a dealership location. Buyers who special ordered a vehicle for later delivery were rated at 854 while those who bought a vehicle from the dealer’s lot were 841. Also, dealer communication of vehicle status during the ordering and build process helps drive real differentiation in customer experience.

EV instruction was very surprising in consumer satisfaction. The study shows that 38% of EV buyers failed to get instructions on EV charging before they left the dealership. Satisfaction is 872 among buyers of premium EVs who received a demonstration but drops to 709 when there wasn’t a demonstration. Among buyers of mass-market EVs, satisfaction is 835 and declines to 717 when there wasn’t a demonstration.

“Explaining how to charge the vehicle should be a mandatory part of every EV delivery,” Sutton said. “Salespeople don’t need to show gas-powered vehicle buyers how to fill their tank, but they do need to show EV buyers how to charge their vehicle.”

Digital retailing satisfaction has made the lack of inventory less important to visit dealerships since buyers have become more comfortable with online shopping and purchasing activities. This year, 85% of buyers say they visited a dealership during the purchase process, down from 88% in 2021. Also, 18% of buyers who purchased a vehicle say they completed the purchase paperwork online, up from 13% a year ago. In addition, The final purchase price was agreed to online by 18% of buyers compared to 15% in 2021.

The J.D. Power 2022 U.S. Sales Satisfaction Index (SSI) study was based on responses from 36,879 buyers who either purchased or leased their new vehicle from March through May 2022.

Buyer satisfaction is based on six factors (in order of importance): delivery process (26%); dealer personnel (24%); working out the deal (19%); paperwork completion (18%); dealership facility (10%); and dealership website (4%). Rejecter satisfaction is based on five factors: salesperson (40%); price (23%); facility (14%); the variety of inventory (11%); and negotiation (11%).

Featured image by Paul Fosse/CleanTechnica

 
 
 
Appreciate CleanTechnica’s originality and cleantech news coverage? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.
 

Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
 

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Advertisement
 
Written By

Tim holds an electronics engineering degree and is working toward a second degree in IT/web development. He enjoys renewable energy topics and has a passion for the environment. He is a part-time writer and web developer, full time husband and father.

Comments

You May Also Like

Cars

There is a trend in the auto world that drives me a bit nuts. When a company comes out with a new model, it...

Cars

US auto sales were up 1% in the 3rd quarter of 2022 compared to the 3rd quarter of 2021, but they were down 13%...

Cars

US Auto Sales: Tesla Up 97% In Q2 2022 vs. Q2 2019, Overall US Auto Sales Down 22% (942,390 Units)

Cars

Here’s what the EV scene looked like a few years ago, pre-COVID: the legacy automakers were slow-walking the transition to EVs, producing just enough...

Copyright © 2022 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.