July 24, 2003

Improved vehicle quality reducing repair work at dealers – study

Westlake Village, California – Quality improvements across the automotive industry are driving down the need for warranty repairs at new-vehicle dealerships, transforming the nature of the dealer service business, according to the J.D. Power and Associates 2003 Customer Service Index (CSI) Study released on Wednesday.

The study, now in its 22nd year, finds the balance of work at dealerships is tilting more toward regular scheduled maintenance as opposed to repairs. The mix of routine maintenance business has increased to 57 percent in 2003 from 47 percent in 1999.

“Less warranty work means that automakers are taking cost out of their products through quality improvements,” said Joe Ivers, partner and executive director of quality/customer satisfaction at J.D. Power and Associates. “To replace this declining revenue, dealers must now compete with other service providers, such as independent service facilities, for customer-paid service business, making them more accountable to their customers.”

Customer satisfaction with dealer service has improved industry-wide by eight points over 2002-851 compared with 843-reflecting the fourth consecutive improvement since the current study metrics were established in 1999.

The study notes that sales increases over recent years among certain franchises, particularly among some European nameplates, have resulted in bottlenecks at service bays. As growth in service capacity and accessibility have been outpaced by sales growth, some customers report frustration getting their vehicles into the dealership in a reasonable and convenient time. The 2003 study shows significant improvements being made in this and other areas, among both Audi and Mercedes-Benz franchises.

“Dealers that now have more customers are being challenged to find ways to keep their customers flowing efficiently through their service bays,” said Ivers. “Efficiency problems can also have a negative effect on other unrelated aspects of the service experience, even with regard to a customer’s critique of the vehicle itself.”

Infiniti ranks highest in the 2003 study with an index score of 900. Saturn, which led in 2002, follows Infiniti in the ranking, dropping four index points to 896. Acura, Lexus and Lincoln tie for third position at 895.

Suzuki is the most improved nameplate in 2003, increasing 5 percent over 2002. Audi and Mercedes-Benz were each up 4 percent, while Ford and Mitsubishi each improved 3 percent.

The CSI study focuses on experiences with the dealer service department during the first three years of vehicle ownership, which typically represents the majority of vehicle warranty periods. The 2003 study is based upon the responses of nearly 106,000 new-vehicle owners and lessees.

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