J.D. Power: Service Volume Decline Likely to Persist
WESTLAKE VILLAGE, Calif. — The challenges that dealers have experienced in their service business due to extremely weak vehicles sales in 2008 and 2009 are likely to stick around for a while.
J.D. Power and Associates projects that dealer service volume will continue falling for "several years," eventually hitting a trough in 2013, according to its 2010 Customer Service Index Study.
Specifically, J.D. Power projects that by 2013, dealer service traffic volume will be 20 percent lower than it was in 2009.
This drop-off will likely spur the amount of service dollars generated from owners of late-model (2005 to 2009) vehicles to fall 25 percent in the same time frame.
And this can be especially hurtful for dealers in times like these, when they lean on the service side of their operations in the midst of sluggish vehicle sales, analysts pointed out.
"Over time, many vehicle owners gradually defect to non-dealer service facilities for repair and maintenance needs, particularly when the warranty period expires," stated Jon Osborn, research director at J.D. Power and Associates.
"With service customer retention becoming more crucial than ever during the next few years, dealerships must focus on not only providing superior levels of customer service, but also on enhancing convenience for vehicle owners and providing pricing that is more competitive with non-dealer facilities," he added.
Continuing on, in its CSI Study, J.D. Power looks at satisfaction levels among vehicle owners stopping by dealerships to take care of maintenance and repair needs.
Officials said the CSI scores for automakers are based on their how dealers perform in the first three years of vehicle ownership, which makes up the majority of a typical warranty period. They measure overall customer satisfaction by considering the following areas: service quality, service initiation, service adviser, service facility, and vehicle pick-up. (These were listed in order of importance).
In the mass market brand rankings, General Motors brands (including the ones the automaker has cut) accounted for six of the top seven spots.
In fact, taking the top spot with the highest CSI score among mass market brands was Hummer, which was rated 815 out of 1,000. Saturn (808) was No. 2, followed by Buick (805), Chevrolet (787) and Mini (786).
Placing sixth was Pontiac (785) and No. 7 was GMC (783).
Officials said Kia and Volkswagen were the two mass market brands showing the greatest upswing in service satisfaction from a year ago.
Placing No.1 in the luxury brand category was Lexus (837), which also won this honor in 2009. Officials said the Japanese luxury make was especially strong in the service quality, service initiation, service adviser and service facility measures.
Cadillac was second among luxury brands with a score of 827, followed by Jaguar (822), Acura (817) and BMW (816).
Cadillac and Mercedes-Benz gained the most ground compared to 2009, officials shared.
Industry-wide, overall satisfaction with dealer service climbed for the 10th straight year, as the CSI score was 767, up from 761 a year ago.
J.D. Power said that dealers have made "notable improvements" in the areas of service facility and service quality versus last year.
Specifically, officials said improvements have been shown in:
—Ease of driving in and out of dealer facilities.
—Thoroughness of the work performed.
—Total time required to complete service on the vehicle.
—Flexibility of accommodating the customer schedules.
—Thoroughness of explanations.
J.D. Power also noticed several other time-related improvements, such as customers being able to get a service appointment on the same day as their initial inquiry call as well as completing service on the same day the customer brought the vehicle in.
"These improvements may be due to not only an increased focus on customer satisfaction from dealers, but also are possibly a result of lower volumes of service traffic that dealers are now experiencing," Osborn noted.
The following is the complete CSI Rankings:
Mass Market Brands
Mass Market Average: 758
Luxury Average: 813
Land Rover: 807