Shanghai, May 28, 2020—JD Power, the world’s leading consumer insights and market research organization, today released the 2020 China Dealer Auto Finance Satisfaction StudySM (DFS). Research shows that during the market downturn, dealers are eager for auto financial institutions to tailor financial products and provide practical business advice to help them improve their sales capabilities and solve their urgent needs.
This year is the sixth research year of JD Power China Dealer Auto Finance Satisfaction Study (DFS). The study evaluates dealers’ satisfaction with auto finance service providers in two areas: retail credit and inventory financing. Retail credit refers to the loan financial products provided by auto financial service institutions to consumers who purchase cars. Inventory financing refers to the business in which dealers obtain financing from auto finance companies or commercial banks to purchase vehicles from OEMs in batches in order to build inventories.
This year’s research shows that the penetration rate of auto finance in the Chinese market has increased slightly from 50% last year to 52%, and the contribution rate of auto finance business to the dealer’s overall profit is only 10%, failing to make a significant breakthrough for four consecutive years.
Ren Hongyan, Vice President of Digital User Experience of JD Power China, said: “The interest rate discount system has been implemented for many years, and the effect of increasing the penetration rate of auto finance has become more and more limited. The competitive reduction of auto finance product fees has also restricted the dealer’s auto finance segment revenue. and further growth in profits. But this does not mean that the importance of auto finance has diminished. According to the JD Power 2019 China Auto Sales Satisfaction Study (SSI), 31% of new car owners said that they would suspend their car purchase plans if they did not have auto finance products It can be seen that as one of the sales strategies, auto finance products can effectively alleviate consumers’ budget anxiety and promote new car sales.”
In addition, facing the increasing pressure of new car sales, dealers have put forward higher requirements for the supply of auto finance products. Research shows that in the field of retail credit, dealers’ satisfaction with retail credit product supply (817 points) lags behind business process (832 points) and sales relationship maintenance (830 points). In the field of inventory financing, dealers’ satisfaction with inventory financing portfolio management (826 points) is lower than that of inventory plan support (843 points), financing credit line (830 points) and sales relationship maintenance (828 points).
Not only that, dealers are also eager for auto financial institutions to provide consulting advice for their business operations in addition to traditional business coordination and product training support. However, in the actual service process, the proportion of financial institutions providing this service is not satisfactory. In terms of retail credit, only 58% of auto finance/finance companies, 52% of financial leasing companies and 30% of banks have provided consulting advice to dealers. In terms of inventory financing, the proportions of auto finance/finance companies and banks providing this service are 54% and 42% respectively.
“At present, dealers urgently need more targeted financial products and more instructive business operation suggestions to help them improve their sales capabilities, which requires financial institutions to continuously deepen their knowledge and understanding of the auto dealership industry. This is to improve dealerships. The key to satisfaction is also an important means to boost dealers’ new car sales.” Ren Hongyan said.
Other findings from the study:
In the field of retail credit, the performance of auto finance/finance companies is comprehensively ahead of other types of financial institutions: In 2020, the overall satisfaction with retail credit of Chinese dealers is 828 points. Among them, the satisfaction of auto finance/finance companies is 851 points, and the dealer satisfaction of financial leasing companies (819 points), banks (813 points) and Internet finance companies (798 points) is lower than the industry average.
In the field of inventory financing, the satisfaction of auto finance/finance companies and banks is roughly the same: In 2020, the overall satisfaction with inventory financing of Chinese dealers is 831 points, of which auto finance/finance companies score 832 points and banks score 831 points. The two also performed very similarly across all study elements. Compared with banks, the advantages of auto finance companies are mainly reflected in the support and business training for sales personnel, as well as the connection between their own management systems and manufacturers’ systems. The advantages of banks are mainly reflected in the speed of support and the ability to provide sufficient financing lines.
In terms of used car business, Internet finance companies performed better than auto finance/finance companies and banks: auto finance/finance companies and banks mainly focus on new cars, while Internet finance companies and financial leasing companies pay more attention to the used car market. In terms of used car retail credit business process and the supply of used car retail credit products, Internet finance companies have the highest satisfaction; in addition, Internet finance companies and financial leasing companies are more efficient in the approval and lending speed of used cars.
2020 China Dealer Auto Finance Satisfaction Study (DFS) Ranking
In the field of retail credit, Genius Auto Finance (883 points), Dongfeng Nissan Auto Finance (878 points) and GAC Finance (850 points) ranked the top three in terms of satisfaction. In the field of inventory financing, GAC Auto Finance (852 points), China CITIC Bank (849 points) and SAIC Finance (844 points) ranked the top three in terms of satisfaction.
The JD Power China Dealership Auto Finance Satisfaction Study (DFS) evaluates dealers’ satisfaction with auto finance service institutions from two areas: retail credit and inventory financing. In the field of retail credit, the three major satisfaction evaluation factors are: product supply, business process and sales relationship maintenance. In the field of inventory financing, the four satisfaction evaluation factors are: financing credit line, inventory financing portfolio management, inventory planning support and sales relationship maintenance.
The 2020 China Dealer Auto Finance Satisfaction Study (DFS) is based on the feedback and evaluation of 2,125 dealers, covering a total of 46 brands and 80 auto finance institutions. Data collection for this study was conducted from December 2019 to March 2020 in 85 major Chinese cities.
