On November 20, the “2019 China Auto Show” hosted by 58 cars was successfully held at Guangzhou Poly Intercontinental Hotel. At the meeting, 58 cars, JD Power and Uxin jointly announced the “2019 China Automobile Value Preservation Rate List TOP 5” and awarded the “Red Sandalwood Award · 2019 China Automobile Value Preservation Rate List” award. Mercedes-Benz and Dongfeng Honda became the biggest winners, each with 6 models. Su Jun, President of JD Power China, and Ren Hongyan, Vice President of Digital Customer Experience attended the event and delivered speeches.
Strong alliance to create an authoritative list
The “Red Sandalwood Award” Value Preservation Rate ranking list jointly issued by 58 cars, JD Power (Jundi) and Uxin is based on the massive listing data and actual transaction data of 58.com, 58 cars and Uxin, after years of practice by JD Power in the United States The car’s three-year value retention rate is obtained after the mature value retention rate model evaluation calculation and localization verification. The research covers more than 1,500 models of more than 140 brands.
The list consists of nine market segments (small car, compact car, mid-size car, luxury car, small SUV, mid-size SUV, large SUV, luxury SUV, and MPV), and is set according to the sample size of the model and the sales status of the model. Strict listing conditions were set, and the winning models of each market segment were finally obtained.
JD Power has first-class industry benchmarking research, high-level customized research and consulting services, advanced data analysis capabilities, and is well-known in the industry for its “independence and impartiality”. Since entering the Chinese market in 2000, JD Power has continued to pass on the “voice of customers” to Chinese auto companies.
In the United States, JD Power already has a very mature evaluation calculation model for the retention rate. In 2015, JD Power fully acquired the Used Car Guide business (UCG) from the National Dealers Association (NADA). Through integration, JD Power complements its advantages in the new car market, manufacturers/captive financial companies with UCG’s advantages in used car evaluation, dealers, lenders and insurers, and deepens the data business composition, based on the value preservation rate analysis , forecasting capabilities, and provide reports, data products, and consulting services for enterprises.
In this cooperation, JD Power introduced the mature model from the United States, improved and verified it based on localized data, and built a value retention rate research system suitable for the domestic market on this basis.
Backed by the largest classified information platform in China, 58che has massive and real closed-loop transaction data of used cars, financial data of used cars and new car data, and has opened up a strategic partner, the leading online trading platform for used cars in China – Uxin Second-hand Car data, and data, is the most important base for studying the preservation rate.
Research on value preservation rate helps to achieve new growth point
With the first decline in new car sales in 2018, the Chinese auto market has officially switched to a stock model, and the competition among car companies has just begun.
The key to the survival of auto companies is sales volume. How to find new growth points in the stock market has become a top priority, and research on the value retention rate will help achieve new growth points. The car value retention rate refers to the ratio of the transaction price after a period of use from the date of purchase of a new car to the guide price of the new car manufacturer at the time of purchase. It is an important indicator to measure the speed of a car’s value decay.
According to the data from the China Automobile Dealers Association, the sales ratio of used cars to new cars in China in the first three quarters of 2019 was about 0.6. Compared with the sales volume of used cars in mature foreign markets, which is more than twice that of new cars, the market potential is still huge. In addition, with the advancement of policies and consumption upgrades, users’ purchase intentions are gradually increasing, and the second-hand car market will gradually enter a period of rapid development.
However, in second-hand car transactions, the market usually needs a transparent, fair, and full-cycle vehicle value measurement scale, and the value retention rate plays an important role here. The stock competition in the new car market is intensifying, and the advantages of brand power, product power, and service power superimposed on the value of vehicles need to be explained to consumers with an easy-to-understand figure.
For car companies, the value preservation rate is forward-looking and instructive. It is a comprehensive reflection of product strength, awareness and reputation. Improvements in replacement and marketing strategies are also important indicators for creating a perfect closed loop of the industrial chain, which can create new commercial value such as finance and replacement, and enhance the ability to manage the entire life cycle of products.
Create a transparent and fair vehicle life cycle value measurement scale
At CRRC, Su Jun, President of JD Power China, delivered a speech “Research on the Preservation Rate of JD Power’s Chinese and American Markets”. Su Jun said that the release of the 2019 China Auto Value Preservation Rate List is an important step for JD Power to create and continuously polish a transparent and fair vehicle life cycle value measurement scale.
“The establishment of the value preservation rate evaluation capability starts from the vehicle disposal/replacement link, connects with JD Power’s existing evaluation system covering pre-sales, in-sales, and after-sales, and opens up JD Power’s product value perspective from the perspective of the entire life cycle of the vehicle. Closed loop with service evaluation.” Su Jun said.
Su Jun also emphasized in his speech the positive correlation between the value retention rate and JD Power’s flagship research, the Initial Quality Study (IQS). The data shows that, taking the most competitive medium-sized SUV market segment as an example, the correlation coefficient between the three-year value preservation rate and the number of problems per 100 vehicles (PP100) exceeds 0.4, reaching a medium correlation level. Taking a medium-sized SUV model on the list as an example, in a year when the number of new car quality problems of this model is low, its value retention rate after three years is also high; in a year with a relatively high number of new car quality problems, the value retention rate also decreases accordingly , the two present a trade-off relationship.
At the end of his speech, Su Jun said that taking the opportunity of value retention rate, JD Power will continue to focus on the whole life cycle research of vehicles, and provide customized research, consultation and supporting data services and products related to value retention rate for industry needs, and help new car planning, Sales strategy, brand promotion, used car transaction transformation, auto finance/insurance/lease pricing and risk control, etc., help car companies improve performance and profitability.
