China Watch : SAIC takes the lead in brand building

Yang Jian, Managing Editor, Automotive News China, 18th August, 2009

In my column last year, I suggested domestic Chinese automakers should take as focused an approach as Shanghai Automotive Industry Corp. has done towards building a respected brand. Today, most of these companies are still struggling on that front. Most of their efforts are focused on the manufacturing side. Companies like Chery and Geely keep rolling out new models, which they hope can lift their brand recognition.

Well, again, they should take more cues from their older brother in Shanghai. SAIC’s experience has shown that to build a respectable brand one also needs to do well on the service side. Since its launch at the Beijing Auto Show in April last year, SAIC’s Roewe 550 compact sedan has won wide acclaim for its graceful design and the fine materials it uses.

The Roewe 550 is not cheap. It has a starting price of 127,000 ($18,594) – twice the average cost of the cars built by other domestic Chinese automakers. However, the car is selling well. In the first half of this year, its sales reached 33,424 units, tripling the figure of the same period last year, according to Automotive Resources Asia (ARA), a J.D. Power unit.

According to the J.D. Power Asia Pacific China Customer Service Index Study 2009, Roewe ranks fourth highest in customer satisfaction with authorized dealer after-sales service, next only to Guangzhou Honda, Lexus and Mercedes-Benz.

What is behind the car’s strong sales growth? Its attractive styling and impressive fit and finish have certainly helped but, of equal importance, are the high quality services SAIC and its dealers offer their customers.

According to the J.D. Power Asia Pacific China Customer Service Index Study 2009, Roewe ranks fourth highest in customer satisfaction with authorized dealer after-sales service, next only to Guangzhou Honda, Lexus and Mercedes-Benz.

The study measures customer satisfaction with maintenance and repair service at authorized dealerships at 12 to 24 months of vehicle ownership. It examines five key factors: service quality, vehicle pickup, service initiation, service advisor and service facility. On a 1,000-point scale, Roewe’s score is 846 points.  That’s the highest ranking a domestic Chinese brand has ever achieved in the annual study, according to Mei Songlin, General Manager of Research at J.D. Power Asia Pacific.

On a 1,000-point scale, Roewe’s score is 846 points.  That’s the highest ranking a domestic Chinese brand has ever achieved in the annual study, according to Mei Songlin, General Manager of Research at J.D. Power Asia Pacific.

High levels of satisfaction with after-sales service will bring in repeat as well as new customers.  For brands with the highest levels of service satisfaction, 34 percent of their customers say they “definitely will” recommend their vehicle brand to friends or relatives, while 16 percent said they would repurchase the same vehicle make, according to the study.

By contrast, recommendation and repurchase rates are merely 20 percent and 8 percent, respectively, among customers of brands with low levels of service satisfaction.  From the Power study, it’s clear that giving customers good service is vital to building a brand that commands their loyalty.

Too bad, then, that Roewe is the only domestic brand earning more than the industry average of 817 points. In this area, SAIC’s compatriot competitors have much work left that needs to be done.

[Source: Automotive News China]

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