New-vehicle sales are sagging, and the COVID-19 pandemic has resulted in additional operational and financial challenges for Canadian dealerships.
But dealerships are improving in the area of customer satisfaction, as well as increasing market share and per-visit cost for maintenance and repair of vehicles 4 to 12 years old.
J.D. Power on Thursday released its 2020 Canada Customer Service Index — Long-Term (CSI-LT) Study, which shows Audi dealerships ranking highest in overall customer satisfaction with a score of 833. NAPA AUTOPRO, at 827, ranks second. Lexus dealerships, at 810, placed third.
The study shows dealers capturing 49% of all service visits for vehicles 4 years old and older. But dealers are showing a cost-per-visit increase. That number is $375 for 2020 compared to $323 for 2019, compared with non-dealer facilities at $241 in 2020 versus $222 in 2019.
The high cost-per-visit means dealerships capture 60% of service revenue in Canada, at approximately $5.5 billion. The industry is estimated at $9.2 billion annually. The dealership segment also shows a slight increase in the average number of customer visits. That number is 1.4 for 2020 versus 1.3 in 2019. Non-dealer facilities have declined from 1.6 visits in 2019 to 1.5 visits for 2020.
Although dealers and aftermarket service providers are facing challenges due to the pandemic, customer satisfaction levels this year have seen strong improvement, J.D. Power Canada automotive research and consulting manager Virginia Connell said in a news release.
“This is quite a testament to the commitment and resiliency of brands, dealers and independent service facilities to deliver an effective — and sometimes exceptional — service experience to their customers,” Connell said in a news release.
The study, which measures satisfaction and intended loyalty among owners of vehicles that are 4 to 12 years old and analyzes the customer experience in warranty and non-warranty service visits, shows dealerships and non-dealers combining for an overall satisfaction score of 791 on a 1,000-point scale.
That is up from 779 in 2019. J.D. Power also found this information notable: Non-dealers average 795 compared with 788 for dealerships.
Another key finding of the study is that two simple tasks elevating customer satisfaction are being overlooked: greeting customers immediately as they enter the shop and returning the vehicle cleaner than when it arrived. Overall, non-dealers continue to better than dealers in that area. The numbers are 49% for non-dealers versus 35% for dealers.
However, dealers are more likely to return vehicles cleaner, at a rate of 38% versus 12% for non-dealers.
“As COVID-19 put new-vehicle purchase intentions on hiatus, vehicle owners are — and will be — holding on to their current and aging vehicles for a longer period, which means more potential for repair opportunities,” Connell said.
Connell continued, “Considering that nearly 40% of the auto service business for dealers comes from repair work, which is also a more lucrative revenue source than maintenance, dealerships should focus on improving all aspects of this service offering, mainly around service advisor and vehicle pick-up.”
Another of the study’s key findings is that dealers increased their share of service visits: Dealers are doing a good job of capturing returning customers for paid service. That stems from increased satisfaction while vehicles are still under warranty. Sixty percent of owners of 3-year-old vehicles in 2020 say they “definitely will” return for paid service. That is an increase from 53% in 2015.
J.D. Power said that has helped dealers increase their overall share of service visits among owners of 4- to 7-year-old vehicles during that same time period, 58% in 2020 versus 39% in 2015.
For the study, overall satisfaction is based on the following factors, in order of importance: service initiation (24%); service quality (23%); service advisor (20%); service facility (17%); and vehicle pick-up (16%). The study, fielded from March through June 2020, is based on responses of 7,882 owners.
The table below has more details and is courtesy of J.D. Power.
Overall customer satisfaction index ranking
(Based on a 1,000-point scale)
|GM dealerships (Chevrolet/Cadillac/Buick/GMC}||798|
|Great Canadian Oil Change||791|