Most value-added services, including competitive financing options, will be less important to consumers in 2012 than last year, according to the results of KPMG’s 13th annual auto executive survey, which was released last week.
The news isn’t all bad for finance companies, though, as the financing of what KPMG calls “e-components” (such as electric car batteries) will become more important to consumers this year.
Only 60% of those surveyed thought that competitive financing options would be important to consumers in 2012, according to the survey, perhaps reflecting hopes about an improving economy causing less worry. That figure is down from 69% in 2011. Meanwhile, the percentage of those surveyed who thought the financing of e-components would be an important value-added service increased to 35%, from 26% last year. The e-component financing is the only service that is projected to be more important this year. Financing options, service quality during the transaction process, warranty options, service options during the vehicle lifespan, and response to product recalls are all expected to be less important in 2012 than they were last year.
KPMG interviews 200 senior automotive executives worldwide in conducting the survey.
Another interesting data point that emerged from the survey was the importance of a captive financing arm to a manufacturer’s performance. Nearly two-thirds of those surveyed said that having a captive financing arm played a major role in the success of a manufacturing operation. The two biggest reasons captives help so much: increased brand loyalty and higher sales, according to the survey.
I don’t think that electric car purchases have progressed enough to have a meaningful impact on overall car sales. The most highly touted electric cars – the Chevy Volt and the Nissan Leaf – sold a combined 17,000 units in 2011, which is a rounding error on a market of nearly 13 million cars and trucks sold nationwide.
As well, the lingering fears of a double-dip recession should still be resonating through the consumer economy, meaning that placing less importance on competitive financing options could be premature.
