Capgemini Study Links Customer Experience at Car Dealerships with Vehicle Manufacturer Loyalty.

Consumer Survey Showed Use of Customer-Oriented Sale Techniques Led Buyers to Negotiate with Fewer Dealers

NEW YORK -- Capgemini, one of the world's foremost providers of consulting, technology and outsourcing services, in collaboration with the Car Internet Research Program (CIRP) of the University of Ottawa, today released the findings from its consumer survey on the role negotiation preferences and tactics play in the car buying process.

The study of more than 600 consumers was conducted to provide Original Equipment Manufacturers (OEMs) and car dealerships with a deeper understanding of the drivers and consequences of the customer negotiation process to ultimately strengthen brand and dealer loyalty. The study showed a correlation between satisfaction with the car salesperson and satisfaction with the vehicle manufacturer, suggesting brand loyalty can be enhanced among consumers based on positive interactions with dealerships. Furthermore, the importance of constructive interaction during the initial stage of the car negotiation process is highlighted, as one out of six buyers visited and negotiated with only one dealer.

In addition, the survey revealed that nearly 75 percent of consumers who visit a dealership with the intention of purchasing a vehicle are fearful of being taken advantage of by the salesperson. Salespeople who recognize consumer fears, and adjust his or her sales techniques accordingly, were found to increase the likelihood of a sale and of the consumer making a more favorable recommendation of the dealership.

"We are pleased to have worked with Capgemini on this study to provide insight into consumer car buying behavior," said Christian Navarre, Director of the Car Internet Research Program. "By leveraging our research capabilities with Capgemini's experience, we are able to show OEMs and dealerships how new information and communication technology will impact the automobile industry."

Customer-oriented salespeople were deemed to be more trustful, according to the survey, helping to mitigate consumer fear and time pressure. This translated into an experience that was more enjoyable for the consumer and resulted in negotiations with fewer dealers, emphasizing the strong correlation between satisfaction with the dealership and satisfaction with the vehicle manufacturer. In contrast to this positive experience, selling-oriented salespeople who were perceived to be focused on closing the deal caused dissatisfaction among customers during the negotiation process and negatively affected the perception of the vehicle manufacturer.

Additional Key Findings

Generally, consumers enter the dealership skeptical about the margins dealerships make on sales and the validity of the price of a vehicle. Approximately 80 percent of respondents indicated that they believe a dealership is working with a gross margin in excess of $3,000 on a $30,000 manufacturer suggested retail price; while 33 percent of consumers believe the margins are in excess of $5,000.

Consumers surveyed fell into two groups based on the negotiation tactics employed at the dealership: transparent and opaque. Transparent consumers were at ease with the salesperson and open about their interest in the vehicle, but had also gathered considerable information prior to entering the dealership and openly revealed their product knowledge. Opaque consumers, on the other hand, were less confident in his or her ability to get a good price and less trustful of salespeople than transparent consumers.

Another compelling finding from the CIRP study highlighted consumer age. The results showed that 65 percent of consumers ages 56 and older were likely to visit two dealers or fewer, and a remarkable 75 percent will sit down at a salesperson's desk just once, at which time they will complete the deal.

"It is clear that there are many factors affecting consumer behavior during the car buying process, as well as their perception of the car brand they will eventually purchase," said Nick Gill, vice president of the Global Automotive Practice at Capgemini. "Our study's findings suggest that vehicle manufacturers have every reason to encourage a customer-oriented environment within their dealership network, especially in light of the recent slump in car sales, to enhance bottom-line performance and strengthen brand and dealer loyalty."

To download the full study results please visit: http://www.us.capgemini.com/DownloadLibrary/requestfile.asp?ID=652

About the Car Internet Research Program (CIRP)

The Car Internet Research Program (CIRP) is an industry and academic-sponsored automotive research program directed at understanding how new information and communication technology will impact the automobile industry. Administered through the University of Ottawa, CIRP is sponsored by a variety of industry stakeholders that include: Capgemini, PSA Peugeot Citro[R]n, Renault SA and The University of Ottawa.

About Capgemini

Capgemini, one of the world's foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working - the Collaborative Business Experience - and through a global delivery model called Rightshore[R], which aims to offer the right resources in the right location at competitive cost. Present in 36 countries, Capgemini reported 2007 global revenues of EUR 8.7 billion (approximately US$12 billion) and employs over 83,000 people worldwide.

More information is available at www.us.capgemini.com.