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One of the key standards automakers apply in sales projections is the repurchase or "repo" rate. The higher the repo rate, the more loyal customers are to the brand. U.S. market researcher J. D. Power conducted a survey on 147,238 new car buyers between November 2007 to May 2008 and found the repo rate for Hyundai cars was 46.7 percent, below the industry average of 48 percent and ranking 13th out of 36 brands surveyed. The repo rate for Kia was 32.5 percent, putting it at 27th.
Honda by contrast scored 64.7 percent, rising to the top spot for the first time, edging out Toyota at 63.2 percent and Lexus in third place with 60.4 percent. Mercedes Benz came in fourth with 58.6 percent, followed by BMW at 58.5 percent. The automakers with the lowest repo rates were Jaguar (26.2 percent), Pontiac (27.2 percent) and Mitsubishi (28.1 percent).
Experts say the reason why Hyundai and Kia's repo rates are lower is not so much the quality of their products but factors involving dealers and service. In other words, Hyundai and Kia car buyers were less satisfied with the purchase process and aftercare. By the same token, Honda's feat was not so much quality but customer satisfaction with service.
Until Hyundai and Kia dealerships are equipped with the quality of service that can win the hearts and minds of customers, it appears they will face difficulties selling more cars not only in Korea but abroad as well.
(englishnews@chosun.com )
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