Evolving market demands agility, J.D. Power warns manufacturers

New energy vehicle makers have to adapt quickly to market changes to win over customers and earn profits amid fierce competition, according to J.D.Power China Automotive Market Insights.

One notable trend is the rise of Gen Z and female car owners in China's NEV boom, said the report released last week.

In 2024, the post-1995 generation, or Gen Z, accounted for 30 percent of the respondents in one of J.D. Power's NEV studies, an increase of 12 percentage points from 2023.

The research shows that they want a highly efficient, transparent, and integrated experience, with higher expectations for seamless online-to-offline services.

One finding is that, if a Gen Z owner makes a service appointment but still has to wait at the dealership, their satisfaction drops 63 points, while for older owners, the drop is only 33 points.

Meanwhile, research on female NEV owners reveals notable trends.

Among other things, they have higher expectations on details and the overall experience.

For instance, this group is strongly dissatisfied with alerts when their vehicles are in driving assistance modes, according to J.D. Power.

Also, both gasoline car and NEV buyers reported more vehicle problems in 2024, primarily about design and smart features.

J.D. Power said that is the result of the accelerated speed to launch new models as well as the rise in the number of in-vehicle functions.

Automakers may face a range of related problems if they fail to consider user scenarios when designing vehicles, said J.D.Power.

Some trends are more general, regardless of age groups or genders. NEV owners were found to be more concerned about vehicle safety in 2024 than the price of such vehicles or their driving range.

The survey shows that the importance of fuel economy and driving range, which increased by 1.9 percentage points in 2023, dropped 2.2 percentage points in 2024.

In comparison, the importance of safety has risen for two years, with a total increase of 8.4 percentage points.

A more surprising finding was that although the proportion of NEVs is rising among new vehicle sales, car buyers tend to believe that they have lower value than gasoline vehicles.

According to a J.D. Power study, among owners with a monthly household income of above 40,000 yuan ($5,480), the average purchase price of internal combustion engine vehicles is 560,000 yuan, while the average purchase price of NEVs is 310,000 yuan.

In terms of service, owner satisfaction improved for both ICE and NEV vehicles in 2024.

However, owners are placing higher expectations on channel service efficiency and are demanding more transparency regarding after-sales service operations and pricing.

Currently, the direct sales model and widespread use of digital channels for NEVs have reshaped the customer experience.

That means the traditional chain-style management model in manufacturing industries is now facing a challenge.

The flat management model allows real-time tracking of owner complaints and needs, enabling faster communication and even getting the supply chain involved to accelerate problem-solving.

This efficient response lifts standards for automakers' management structures, prompting them to accelerate toward more agile and efficient operations. In this process, building an effective digital system is crucial, said J.D.Power.

By achieving cost reduction, improved efficiency and effective collaboration, automakers can gain a competitive edge in the fierce market competition.

Finding the best balance between cost control and customer experience will be key to gaining market share and ensuring long-term development, it said.