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J.D. POWER REPORT / A Closer Look at California Auto
Market

Dealers Take Note: California's Car Buyers Are Tougher Crowd

July 30, 1998|JOHN O'DELL | TIMES STAFF WRITER

Southern California revels in its ethnic diversity and educated populace, but the qualities that help make it a vibrant place in which to live and work are making life difficult for its new-car dealers--and car buying no great experience for customers--researchers at J.D. Power & Associates have found.

Car dealers didn't fare well nationally when the automotive ratings firm questioned consumers for its annual Sales Satisfaction Survey: Only half the nation's buyers of new cars and trucks say they are completely satisfied with the buying experience.

But in Southern California--indeed, throughout the whole state--the approval rating is even lower, with six of 10 buyers voicing some disappointment with the dealership they dealt with.

The study, conducted for Highway 1, drew a "can't comment" from Jay Gorman, vice president of the California Motor Car Dealers Assn. "We don't always agree with their findings," he said of the Power organization.

Several car dealers, though, said the California results matched their own theories.

"It doesn't surprise me at all," said John B.T. Campbell, whose company owns the Saturn and Saab franchises for Orange County--a total of six dealerships. "I've gone to Saturn for years and pointed out that even in their own studies, Saturn dealers score lower in California than elsewhere."

Campbell believes the area's car shoppers "are more demanding, so they typically give lower scores" on satisfaction surveys than buyers in other parts of the country.

The Power study of California responses seems to bear him out.

"Californians rate dealers lower than the nation as a whole on every component" of Power's recently completed 22-point survey, said Loretta Seymour, director of the Agoura Hills company's sales satisfaction operation.

The reasons, revealed in a look at Californians' responses to the survey, are pure Golden State.

"New-car buyers are better educated in California than in the rest of the country," Seymour said, noting that 56% of respondents here are college graduates, compared with 45% nationwide.

"And better-educated people have higher expectations than others."

Car dealers often don't have sales forces that can match wits with customers who come to the showroom after spending scores of hours reading--in newspapers and magazines and on the Internet--about the vehicles of their choice, says Marc Spizzirri, owner of Board Ford in Whittier, Family Ford in Montebello and Family Toyota in San Juan Capistrano.

Power found that Californians are more likely than consumers in other states to do their homework before buying a new vehicle. This proved true in every category surveyed: price guides, consumer guides, the advice of friends or relatives, other owners of the same make, manufacturers' Web pages, dealer Web pages and Internet shopping services.

Car shoppers also are more culturally diverse here than in the rest of the country because of California's relatively large Latino and Asian American populations, the survey found.

Latinos buy 10% of the new cars sold in California but only 4% nationally, and Asian Americans account for 12% of California's new-car buyers, versus 3% nationally. There was little difference among African Americans, who account for 2% of buyers here, 3% nationwide.

Salespeople, Seymour said, are not always "equipped with the skills to deal with a culturally diverse customer base."

Spizzirri points out one area Seymour missed: the preponderance of female car shoppers. About 80% of all car-buying decisions are made by women, studies have found. "But most dealerships are not staffed to reflect that," Spizzirri says.

"The issue is how communication from the dealer comes across to the customer," she said. "Dealers need to train their people . . . in how to deal with customers of varying cultures and languages. Basically, people want to be treated like they are important and like they matter."

*

The top three turnoffs for car buyers, the survey found, were the same in California as nationwide: dealers not keeping their promises, intimidating or confrontational sales tactics, and complicated buying processes that involve multiple negotiations.

Significantly, while Asian imports have greater market share in California than in the U.S. as a whole (39% versus 30%), their dealers get the lowest approval ratings, falling well below European and domestic dealers.

Seymour reasons that this is true, in part, because many dealers for the most popular Asian brands run high-pressure stores that rely on volume for their success.

Several dealers who requested anonymity acknowledged the problem but said it is visited on them from the factories because of competitive allocation systems based on sales volume. "If you have a yellow sedan, and the customer wants a green one and the allocations for next month are being made at the end of the day, you sell the customer the yellow one," as one dealer put it.

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