Automotive dealers face headwinds as service spend declines, finds market study.
30 Sep 2019 | 27514 Views | By Autocar Pro News Desk
The findings of the J.D. Power 2019 India Customer Service Index (Mass Market) Study are out. Hyundai Motor India has been ranked highest in overall service satisfaction with a score of 903, followed by Tata Motors (870) and Mahindra & Mahindra (863).
The J.D. Power 2019 India CSI Study is ...
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The findings of the J.D. Power 2019 India Customer Service Index (Mass Market) Study are out. Hyundai Motor India has been ranked highest in overall service satisfaction with a score of 903, followed by Tata Motors (870) and Mahindra & Mahindra (863).
The J.D. Power 2019 India CSI Study is based on responses from 7,177 new-vehicle owners who purchased their vehicle between March 2016 and August 2018. The study was fielded from March through August 2019.
Now in its 23rd year, the study measures new-vehicle owner satisfaction with the aftersales service process by examining dealership performance in five factors (listed in order of importance): service quality (30%); service initiation (18%); service facility (18%); service advisor (17%); and vehicle pick-up (17%). This study examines service satisfaction in the mass market segment.
With India experiencing a decline in sales volume and a drop in average after-sales spend, automotive dealers are feeling the effects of a difficult year, according to the study, released today.
The study finds a 10 percent drop in the average amount spent per service visit compared with 2018. On average, customers spend Rs 5,000 per service visit, compared with Rs 5,600 in 2018. The decline is greatest among aftersales customers who are 39 years or older, whose spend declined 17 percent year over year. The decline in service revenue is significant for dealers as 31 percent of their profits are generated from aftersales compared to 25% from sales.
“Typically, dealers rely on service work to keep their businesses profitable especially during a downturn in new-vehicle sales,” said Kaustav Roy, Director and Country Head for India, J.D. Power. “A drop in average service spend bodes negatively for overall dealer profitability. More than ever, dealers need to focus on delivering an excellent service experience to retain customers and encourage loyalty and advocacy.”
The study says for customers who rate their experience in the top quartile of satisfaction (929 points and above on a 1,000-point scale), 89 percent are more likely to return for post-warranty service work. Similarly, 90 percent of customers in the top quartile will recommend the service centre to a friend or relative.
Additional key findings of the 2019 study are:
Reluctance to go digital: Aftersales customers rarely use digital channels to set appointments despite indicating higher satisfaction when used. Satisfaction is 875 among the 1 percent of customers who use a manufacturers’ app and 868 for the 2 percent who use a dealer’s website. For the majority (81%) who still prefer to call a dealer, satisfaction is 831. Customers who walk in without an appointment (14%) are the least satisfied (786) across all appointment types.
Fewer customers stay at the dealership: More than one-fifth (21%) of customers stay at the service centre during their visit, a decline of 10 percentage points from 2018. However, satisfaction is typically higher among customers who wait for their vehicle service to be completed (837) vs. those who opt to leave and then return (821).