IPSOS QUALITY AWARDS PURCHASING AND SERVICING JUNE 2015

TABLE OF CONTENTS 2 01 Background 02 About the Research 03 Automotive Market Overview 04 Headline Results 05 Demographic Comparisons 06 About the Awards 07 Ipsos Quality Awards 2015 (CCE Purchasing and Servicing)

01 BACKGROUND

WHO IS IPSOS 4 South Africa Sudan Ethiopia Somalia Namibia Botswana Zimbabwe Zambia Mozambique Tanzania Kenya Democratic Republic of the Congo Uganda Angola Congo Gabon Cameroon Nigeria Chad Niger Algeria Egypt Libya Mali Mauritiania Morocco Cote d’ Ivoire Ghana Burkina Faso Sierra Leone Senegal Ipsos Offices Ipsos Research Partners Largest research company in Africa 3 rd largest globally

IPSOS AND THE AUTOMOTIVE INDUSTRY 5 Centre for Proactive Marketing Proactive Insight Synovate Ipsos has been commissioned to conduct market research on behalf of the South African Automotive industry since 1991 The research follows a syndicated format with various Original Equipment Manufacturers contributing ideas and funding. Any OEM can participate if they:  Supply customer names for interviewing  Agree to the rules of syndication  Participate in meetings / decisions regarding syndicate business in a transparent and open manner

The Competitive Customer Experience (CCE) component of the research focuses on the customer experience when making a new purchase or servicing a vehicle at a franchised dealership 6 02 ABOUT THE RESEARCH

7 CCE REPRESENTATION interviews

FAQS 8 Who do we speak to? Where do we get the names from How do we interview them What Quality assurance is there? New vehicle owners and owners who have just had their vehicle serviced – within 35 days Supplied by OEMs, quality checked and submitted to CATI team Telephonically using CATI Four quality gates are in place ISO and ISO 9001 : 2000 compliant

QUALITY GATES 9 Gate 1: Format – Electronic data source (Warranty System, OEM Sales database) Gate 2: Pre-Quantity – Volume of records received, compared to NAAMSA reported dealer sales May not vary by more than 10% Gate 3: Pre-Quality – Record must contain each of the following: Individual’s surname A valid contact number (mobile or landline) A valid OEM model description Gate 4: Post Quality – The following outcomes of contact attempts are deemed to be errors in data: No such person Do not own vehicle Wrong number Sampling frame (customer names) managed via ‘Quality Gates’

RESPONDENT SELECTION 10 Random selection of respondents via an automated algorithm built into the CATI system All interviews are recorded Interviews only completed if the following is confirmed at the start of the interview: Customer identity Transaction date Dealership name Personal involvement in the entire Purchasing / Servicing process Not employed by a motor manufacturer or any of their dealers

ANALYSIS OVERVIEW 11 BEHAVIOURAL EMOTIONAL RELATIONSHIP COMPLIANCE Customers are asked to rate a series of attributes using either a 10-point or 2-point scale An Index Score is derived as an average of all attribute ratings* Brands are grouped into ‘tiers’ based on statistically significant differences in scores** Quality Awards are only presented to brands within the top three ‘tiers’: Gold Silver Bronze *Each rating has an associated score from 0% - 100% in equal increments according to the rating. **Using confidence intervals calculated on a 95% confidence level. Results are weighted based on market share

Improvement strategies identified & implemented METHODOLOGY 12 Customer gives feedback about experience Dealership captures customer details on system Customer purchases / services vehicle at Dealership Manufacturer submits customer data to Ipsos Ipsos call-centre agent contacts customer Customer feedback extracted, processed and analysed Reporting is generated and issued to manufacturers CCE

03 AUTOMOTIVE MARKET OVERVIEW 13

NAAMSA DEALER SALES 14 Current PC Sales ~ 2007 Current LCV Sales ~ 2008

VOLUMES VS. INTEREST RATE: PASSENGER CARS 15

VOLUMES VS. INTEREST RATE: LCV 16

MARKET SHARE PER BRAND 17

MARKET EVOLUTION 18 Maintaining and growing market share continues to become more challenging for South African Automobile Manufacturers in an increasingly unforgiving environment … Year-on-year new vehicle sales declined in 2014, following four years of post- recession growth. Current Dealer Sales are more or less on par with 2007 / Sales volumes are likely to remain under pressure in 2015 due to: New car price inflation Increasing overall living costs Yet consumers continue to be presented with more choices than ever before as the number of available Brands grows: Passenger Car Brands increased from 17 in 1994 to 45 in 2014 Light Commercial Vehicle Brands increased from 9 in 1994 to 26 in 2014

RESPONDING TO CHANGES IN THE MARKET 19

LISTENING TO THE MARKET: SERVICE EXCELLENCE Service Excellence can be decisive in differentiating Brands from the competition But what does ‘Service Excellence’ mean when purchasing or servicing a vehicle? What motivates customers to buy and service the vehicles that they do? What are the customer expectations of the process? 20 Ipsos has undertaken a robust and exhaustive Qualitative investigation to uncover and unpack the deep-seated needs and motivations of South African automotive customers Censydiam techniques were used to analyse customer feedback obtained through: Focus groups In-Depth-Interviews Ethnographies

INTRODUCING THE CENSYDIAM MODEL 21 A vehicle offers me mobility and independence To suit my available budget To take care of, and look after my family To proclaim my success for social recognition To enjoy and explore my freedom The vertical dimension refers to the way in which the individual interprets and handles the meaning of vehicles for her / himself The horizontal dimension refers to the way in which the individual translates the basic meaning of vehicles within the social surrounding

CUSTOMER MOTIVATIONS 22 To proclaim my success for social recognition To suit my available budget To take care of and look after my family To enjoy and explore my freedom The Energisers - My vehicle expresses my passion for life and gives me vitality The A-Listers - My vehicle is a way to confirm social status and financial superiority The Protectors - My vehicle protects me and my family and gives me peace of mind The Unifiers - My vehicle is a way to make me feel accepted by my family and friends The Badgers - My vehicle enables me to indulge in my interest and stand out from the crowd The Free-fallers - My vehicle is a way to demonstrate my independence and a source of pure pleasure The Penny- Pinchers - The cost of my vehicle assures me that I will maintain my independence Fun-Lovers - My vehicle offers social liberation A vehicle offers me mobility and independence

DOMINANT POSITIONING OF VEHICLE SEGMENTS 23 The Energisers Passionate Action The A-Listers Fashionable Power The Protectors Reliable Protection The Unifiers Caring Provider The Badgers – Unconventional Distinction The Free-fallers Enjoyable Pleasure The Penny- Pinchers Measured Certainty Fun-Lovers Social Liberation A vehicle offers me mobility and independence SUV offer exclusive comfort & superior safety LCV is an adventurous workhorse LUX suggests stylish exclusivity Volume solely about accommodating freedom of movement

KEY PURCHASING EXPECTATIONS 24 The Energisers Passionate Action The A-Listers Fashionable Power The Protectors Reliable Protection The Unifiers Caring Provider The Badgers – Unconventional Distinction The Free-fallers Enjoyable Pleasure Fun-Lovers Social Liberation Test-drives important to experience vehicle’s performance (and limits) Salesperson to be knowledgeable about performance outputs & limitations Quite often impulse purchase (emotionally driven) Sales process should be fun, easy and fast Test-drives important to experience pleasure of driving the vehicle Not detailed-oriented & not dealership loyal Strongly influenced by word-of- mouth Salesperson to understand need for social connection & how vehicle features play into this need Personalised contact with salesperson & Motor Clubs appeal Strongly influenced by word-of-mouth Friendliness & helpfulness of salesperson appeals Communication & follow-up is key Wants to feel part of the dealership family (after-sales relationship important) Expects exceptional & exclusive treatment Be treated as a high valued customer (flattery appeals) Expect salesperson to ‘make the sale happen’; wants hands-off process (only need to sign) Overt fanfare connote acknowledgement of status Superior after-sales service is expected Purchases are planned & controlled Primary source is internet (salespeople are regarded with suspicion) Expect transparency of costs & detailed quotations Expects exceptional & exclusive treatment Salesperson to be very knowledgeable, professional and to-the point (no flattery or grovelling) No need to accompany delivery with overt fanfare (but appreciate customised gifts) Superior after-sales service is expected Word-of-mouth is trusted Expect salesperson to be honest/transparent Detailed explanations & quotations appeal (no hidden agendas) The Penny- Pinchers Measured Certainty

KEY SERVICING EXPECTATIONS 25 The Energisers Passionate Action The A-Listers Fashionable Power The Protectors Reliable Protection The Unifiers Caring Provider The Badgers – Unconventional Distinction The Free-fallers Enjoyable Pleasure Fun-Lovers Social Liberation Basic expectations – reliable, speedy & convenient Proactive reminders appreciated (due to busy lifestyle might forget) Easygoing “as long as what needs to be done is done” and communication channels remain open Friendliness & helpfulness connote a trusted service Tend to be dealership loyal (sense of belongingness) and expect loyalty in return (loyalty programme appeals) Main expectation to run smoothly & according to plan Courtesy calls show appreciation for support Expects exceptional & exclusive service Proactive reminders, no queuing, individual drop-off service/courtesy vehicle & vehicle to be exceptionally clean on collection Prefer a hands-off process (everything to be done on their behalf, from booking in to collection) Tend to be difficult customers, want to feel in control Expect perfection to get money’s worth Detail is valued ito feedback, final inspection & invoice Might consider non-accredited dealerships (more affordable) Expects exceptional & exclusive service – perfectionism, professionalism, respect, & personalised Proactive reminders, no queuing, individual drop-off service/courtesy vehicle & vehicle to be exceptionally clean on collection Values control – expect detailed feedback & technical expertise) Main expectation is a reliable & trusted service Accredited dealerships offer peace-of- mind Punctuality and attention to detail is valued Guarantee safety of vehicle (detailed inspection & no unauthorised usage The Penny- Pinchers Measured Certainty

IMPORTANT VEHICLE FEATURES 26 The Energisers Passionate Action The A-Listers Fashionable Power The Protectors Reliable Protection The Unifiers Caring Provider The Badgers – Unconventional Distinction The Free-fallers Enjoyable Pleasure Fun-Lovers Social Liberation Power (engine size, torque) Speed Sporty/dynamic/outdoorsy/rugg ed design Off-road capabilities (e.g., 4X4, ground clearance, etc.) Vehicle segment dependent Creature comforts that enhance pleasurable driving Socially recognisable / acknowledged brands (by peers) Family comfort (sufficient boot- & leg-space & 4 doors) Premium brands that enjoy mainstream popularity as status symbols Looks (design, colour, visible features) are important Extensive creature comforts Superior speed & performance Affordability & value for money, i.e.: Purchasing price, best interest rates, inclusive extras, maintenance & service plans, insurance costs, resale value & reliability of brands Unique features appeal (e.g. original design, distinctive gadgets, or superior functionality) Colour, speed, fuel-economy & price not main determinants in choice Preference to brands admired by those ‘in the know’ Preference to familiar, trusted brands associated with safety & reliability Safety features (airbags, ABS brakes, etc.) Security features (e.g., tracker, locking system) The Penny- Pinchers Measured Certainty

04 HEADLINE RESULTS 27

PURCHASING EXPERIENCE OVER TIME % 92.6%

PURCHASING EXPERIENCE: BIGGEST IMPROVEMENTS 29

SERVICING EXPERIENCE OVER TIME % 88.2%

SERVICING EXPERIENCE: BIGGEST IMPROVEMENTS 31

KEY ATTRIBUTES: PC SALES 32 n=7878 Top 5 attributes Bottom 5 attributes

KEY ATTRIBUTES: PC SERVICE 33 n=10297 Top 5 attributes Bottom 5 attributes

KEY ATTRIBUTES: LCV SALES 34 n=3719 Top 5 attributes Bottom 5 attributes

KEY ATTRIBUTES: LCV SERVICE 35 n=4177 Top 5 attributes Bottom 5 attributes

05 DEMOGRAPHIC COMPARISONS

PASSENGER VEHICLES: BY GENDER 37

PASSENGER VEHICLES: BY AGE GROUP 38

PASSENGER VEHICLES: BY POPULATION GROUP 39

PASSENGER VEHICLES: BY PROVINCE 40

LIGHT COMMERCIAL VEHICLES: BY GENDER 41

LIGHT COMMERCIAL VEHICLES: BY AGE GROUP 42

LIGHT COMMERCIAL VEHICLES: BY POPULATION GROUP 43 *Small base size. Please exercise extreme caution when interpreting results

LIGHT COMMERCIAL VEHICLES: BY PROVINCE 44

06 ABOUT THE AWARDS

IPSOS QUALITY AWARDS 46 The most prestigious awards for exceptional Customer Sales & Service Experience that meets or exceeds Global Standards Ipsos Platinum; Ipsos Gold; Ipsos Silver; Ipsos Bronze

47 SURVEY COVERAGE Brands included*: Audi BMW Chevrolet Citroën Ford Isuzu Honda Kia Lexus Mazda Mercedes-Benz MINI Nissan Opel Peugeot Renault Toyota Volkswagen Volvo Brands excluded: Chery Chrysler Daihatsu Dodge Fiat GWM Hyundai Jaguar Jeep JMC Land Rover Mahindra Mitsubishi Porsche Subaru Suzuki Tata CCE results are based on more than interviews. * Some segments may exclude certain brands due to n<150

CATEGORIES 48 Ipsos Quality Awards (Purchasing and Servicing 2015) Passenger CarHighest Ranked: Ipsos Gold Second Position: Ipsos Silver Third Position Ipsos Bronze Passenger Vehicle Purchasing Experience Passenger Vehicle Servicing Experience Light Commercial Vehicles Light Commercial Vehicle Purchasing Experience Light Commercial Vehicle Servicing Experience Ipsos Platinum A discretionary award based on exceptional overall performance Ipsos Platinum A discretionary award based on exceptional overall performance All results based on transactions between Jan and Dec 2014

RANKING EXPLANATION 49 Which shot is better? The difference between them is too marginal to assess and so they are both deemed to be winning shots Statistical precision and accuracy works in a similar way: The differences between certain scores may be statistically too small within the range of statistical tolerance to establish with certainty which performance is actually better

07 IPSOS QUALITY AWARDS 2015 (CCE PURCHASING AND SERVICING)

PASSENGER VEHICLE PURCHASING EXPERIENCE 51 SILVER: 93.9 – 96.0 GOLD: 96.1 – 97.3 BRONZE: 91 – 93.8 Ford Lexus Mercedes-Benz Renault Volvo BMW Chevrolet Nissan Opel Toyota Audi Volkswagen

PASSENGER VEHICLE SERVICING EXPERIENCE 52 SILVER: 89.2 – 91.6 GOLD: 91.7 – 93.8 BRONZE: 86.2 – 89.1 BMW Honda Mercedes-Benz Toyota Chevrolet Lexus Nissan Volkswagen Audi

LIGHT COMMERCIAL VEHICLE PURCHASING EXPERIENCE 53 SILVER: < 93.0 GOLD: 93.1 – 95.5 Chevrolet Ford Nissan Toyota Isuzu Volkswagen

LIGHT COMMERCIAL VEHICLE SERVICING EXPERIENCE 54 SILVER: < 86.4 GOLD: 86.5 – 91.0 Ford Chevrolet Isuzu Nissan Toyota Volkswagen

THANK YOU Patrick Busschau Braam van Tonder