Buyers Rank Their Dealership Experience

More bad news for new-car dealers

In extolling the wonders of new cars, we sometimes forget about the importance of the role the dealership can play after the sale. Getting a quick service appointment, having the work done right and on time, with as little stress and as few surprises as possible — all are the hallmarks of a dealer worth keeping.

Every year, J.D. Power and Associates surveys owners about how happy they are with their dealership, and the results become the Customer Service Index. And in the 2010 survey, which polled 114,000 owners between October and December of last year, some bad news for dealers was sandwiched into the usual reports for owners: The big drop in new-car sales almost surely means fewer service visits to dealers, and service operations are even more the lifeblood of such operations when sales go bad. J.D. Power projects that parts-and-service revenues at dealers will fall 20 percent, bottoming out in 2013.

“It’s more fun and sexy to sell new cars, but the fixed service operations are critical to paying the bills,” said Jon Osborn, research director at J.D. Power.

You might think that people hanging onto cars longer means more repair work for dealers, but not so. As new-car warranties expire, owners tend to get more repairs done at aftermarket shops instead. If a dealer can’t replace those departing customers with a steady influx of new-car buyers with fresh warranties in hand, the service business plummets.

On the consumer front, Lexus was tops in the survey among all brands, which measures every aspect of the service experience, from flexible appointments to the quality of repair work.

Among luxury brands, Cadillac (second place behind Lexus) and Mercedes (seventh place) enjoyed the biggest single-year jumps in scores. (Mercedes, despite the bump, still ranks slightly below the luxury-brand average.)

A quartet of General Motors brands — Hummer, Saturn, Buick and Chevrolet — swept the top four spots among nonluxury brands. (Too bad the Hummer and Saturn stores are about to hang a permanent “Gone Fishing’” sign on their defunct brands.) And only two Asian mass-market brands — Japan’s Honda and South Korea’s Hyundai — managed to score above the industry average for customer service satisfaction. And in case you are wondering, the Toyota recall and its attendant firestorm came a bit too late to affect this year’s survey.

As for dealerships that bombed in the study, Volvo was in last place among luxury brands, with Infiniti second from the bottom. Suzuki brought up the rear among mass-marketers, with Mazda ranked just ahead.

“Exhaust Notes” Blog posted by Lawrence Ulrich on Monday, March 1, 2010 8:42 AM