NFO Rankings: 2004 India TCS

Maruti Udyog and Toyota Models Dominate 2004 Total Customer Satisfaction Rankings

Future Vehicle Purchase Replacement Cycle shortening; Strong Up-gradation intent towards 4-Door Sedans

New Delhi, October 26, 2004… According to the findings of the 2004 4-wheeler total customer satisfaction study released today by leading market information provider, TNS, Maruti and Toyota models rank highest in six out of the ten vehicle segments. Among the new models launched since TNS' 2003 study, Ford Endeavour achieves top honors in the "premium SUV" segment.

Representing the responses of more than seven thousand car buyers towards the performance of over 40 models in the key areas of sales satisfaction, product quality, vehicle performance and design, after-sales service, brand image, and cost-of-ownership, the 2004 4-Wheeler Total Customer Satisfaction (TCS) study conducted by TNS specialist division, TNS Automotive, is the largest syndicated automotive study in India. The TCS index score provides a measure of commitment a given model or brand enjoys with its customers.

Rankings for the TCS study are done at the vehicle segment-level to provide comparisons among similar groups of vehicles. The ten models ranking highest in their respective segments for total customer satisfaction are: Maruti 800 for "entry compact"; Maruti Zen Petrol for "premium compact"; Tata Indica Diesel for "small car - diesel"; Maruti Esteem Petrol for "entry midsize"; Mitsubishi Lancer Petrol for "midsize"; Toyota Corolla for "premium midsize"; Mitsubishi Lancer Diesel for "midsize car - diesel"; Toyota Camry for "entry luxury"; Toyota Qualis for "SUV"; and Ford Endeavour for "premium SUV".

"The industry witnesses an improvement on all areas of customer ownership experience except sales satisfaction," said Rajeev Lochan, General Manager (Asia Pacific) of TNS Automotive. "Performance & design, brand image, and after-sales are the three most improved aspects for the industry. The decline in sales satisfaction can partly be attributed to the increasing sales volume, indicating the difficulty in managing customer expectations in a growing market" he added.

While the industry has improved overall, the customer expectations across all study components too have increased. The 2003 study had identified performance & design, after-sales, and cost of ownership as key hidden opportunities where the importance has strengthened even further this year.

"Anticipating customer needs and exceeding expectations on those areas holds the key for greater customer commitment," comments Lochan. "The segment-leading models have demonstrated the ability to improve and differentiate on areas such as performance & design and after-sales that are high on importance for their customer."

In addition to the customer evaluations on various aspects of their ownership experience, TNS has been tracking the industry trends since 2002. One key finding emerging is the shortened cycle-time for replacement/ additional car purchase. Compared to a cycle-time of close to 5 years in 2002, the 2004 study observes a significant reduction to a cycle-time of less than four and a half years. Some of the other key trends are:

· Increase in owners purchasing additional/ replacement cars - 64% additional/ replacement buyers in 2004 compared to 49% in 2002. This shift is significant in north and west compared to south India.
· High preference for 4-door sedan in the future - among those decided on the future purchase, 52% indicate a preference for 4-door sedan.
· Increase in budget for next car - among those decided on the future purchase, the average budget is close to rupees 700,000 (rupees 625,000 in 2003).
· Nearly one-fifth of motorcycle owners (basis: TNS' motorcycle study) indicate a preference for upgrading to cars with a budget ranging from rupees 200,000 to 400,000.
· Makes like Honda, Toyota, and General Motors enjoy a high mind-share among future additional/ replacement buyers. Small car manufacturers like Maruti and Tata Motors are high on the preference for future up-graders from motorcycles, while Hyundai finds a balance between the two groups.

"These trends clearly indicate that the combination of a shortened replacement cycle-time, increase in upwardly mobile multi-car households, and up-graders from motorcycle owners is and will continue to fuel the double-digit growth in the car industry," observes Lochan. "Small car manufacturers will largely benefit from the rapidly growing base of motorcycle owners, while midsize car makes like Honda are strongly placed to capitalize from the shortened cycle-time among future replacement/ additional car buyers."