As the coronavirus crisis continues to interrupt global supply chains, auto dealers are bracing for parts shortages that could undermine customer satisfaction. The new J.D. Power 2020 Customer Service Index Study shows that overall satisfaction has increased to 837 points out of 1,000, marking the fifth consecutive year of increasing satisfaction.
“There’s no telling how widespread or long lasting the ripple effect of the coronavirus will be for the automotive industry, but it inevitably will have a financial effect on dealers’ service business,” says Chris Sutton, vice president of the U.S. automotive retail practice at J.D. Power in Troy. “Automakers and dealers need to prioritize securing sources for their parts supplies or face the consequences of losing business. Customers will be initially understanding of coronavirus consequences, but shortages will continue well beyond the current public health crisis. Customers will not understand in August, for example, why there are no parts to repair their vehicles.
“Performing work right the first time is the most critical activity for service satisfaction, and dealers now do a good job by successfully completing work 94 percent of the time,” Sutton said. “Under normal circumstances, 20 percent of the work that isn’t completed the first time is due to parts being unavailable, which is a source of frustration for customers. That 20 percent could dramatically increase due to parts suppliers’ extended shutdowns in China and other locations. When parts are unavailable, customer satisfaction and intended loyalty significantly decline.”
Overall satisfaction declines 155 points among luxury vehicle owners when parts are unavailable. This drop is 141 points for owners of mass market vehicles. This is a drop from 63 percent to 30 percent of owners in the luxury segment who say they “definitely will” return for service. The drop is from 58 percent to 26 percent in the mass market segment.
The study measures satisfaction with service at a franchised dealer or independent service facility for maintenance or repair work among owners and lessees of vehicles that are 1-3 years old. It also provides a numerical index ranking of the highest-performance automotive brands sold in the U.S., which is based on the combined scores of five different measures that comprise the vehicle owner service experience: service quality, service initiation, service adviser, service facility, and vehicle pick-up.
Key findings of the 2020 survey are:
- The total time to complete vehicle service is most important to customers.
- Customers ages 25-42 represent a growing percentage of new-vehicle buyers and have lower satisfaction than older customers by 36 points. However, they have higher intended dealer loyalty for paid service work than similarly aged customers did 15 years ago – 49 percent say they will definitely return compared with 42 percent in 2005.
- After three years of vehicle ownership, customers ages 25-42 drive 13 percent fewer miles than similarly aged customers did 15 years ago. Coupled with the lengthening of serve intervals, the average number of annual service visits is down to 2.4 from 3. The decreased interaction shows that dealers need to be aware of their limited access to the group and find ways to make positive impressions when these customers come in.
- Dealers capture 88 percent of customers’ annual service visits in the first three years of ownership compared to nondealers. This is up from 79 percent in 2015. Dealers must retain customers through the warranty period as defection to the aftermarket occurs rapidly after warranty expiration. About 21 percent of aftermarket service customers who own 5-year-old vehicles serviced them at new-vehicle dealerships in the past year, and only 8 percent with vehicles 10 years and older visited a dealer for service in the past year.
“Several long-term challenges lie ahead for the service business aside from supply issues,” Sutton says. “With vehicles requiring less frequent maintenance and owners driving fewer miles—thus, stretching out the time between service visits—dealers need to do everything they can to keep satisfaction moving in a positive direction. Retaining customers as vehicles age and warranties expire is key for dealers, especially as the sales market slows.
Simple things like returning a vehicle to the customer cleaner than when it was brought in can increase satisfaction scores by 31 points, and dealers do this less than half the time. There’s no time to slack on delivering what customers expect if service departments are to continue to comprise a large percentage of dealership profitability.”
Lexus has the highest satisfaction with dealer service among luxury brands, with a score of 889. Cadillac and Porsche rank second, each with a score of 882. Inifiti comes next at 875 and Lincoln is fifth with 872.
Buick (861) ranks highest in satisfaction among mass market brands for a fourth consecutive year. Next comes Chevrolet (852), GMC (847), Mitsubishi (846) and Toyota (843).
The study is based on responses from 71,286 registered vehicle owners and lessees of 2017-2019 model-year vehicles. The study was fielded from August through December 2019.