Poor Dealer Service During Warranty Period Tends to Drive Owners To Other Facilities: JD Power

Lexus Dealers Repeat Top Ranking in Satisfaction with Vehicle Service

FOR IMMEDIATE RELEASE: October 25, 2001

AGOURA HILLS, Calif.—How customers are treated by dealerships during their first three years of warranty service dictates whether they return to dealers for post-warranty service and repairs, according to the J.D. Power and Associates 2001 CSI-Service Retention StudySM (SURS) released today.

"Customers approach the vehicle ownership experience with concrete expectations about service," said Joe Ivers, partner and executive director of quality and customer satisfaction research. "When the warranty ends, customers exercise unrestricted consumer choice, taking their business to either the dealerships or the aftermarket providers. Poor service treatment during the warranty period by dealers tends to drive customers to aftermarket facilities."

Service providers with the highest satisfaction levels among their customers tend to have the highest retention, according to the study. Lexus, which retains 84 percent of service customers, ranks highest in service satisfaction among post-warranty customers for the second year in a row. Lexus service customers have high praise for the dealership’s ability to see customers in a reasonable amount of time.

Among those who do not return to dealers for service, usually due to dissatisfaction of some kind, the greatest share of business goes to independent service garages (approximately 21 percent).

"Independent garages, which collectively follow Lexus in overall service satisfaction, often provide a high level of personal service that instills confidence and trust in their customers," said John Harbicht, senior manager of service satisfaction at J.D. Power and Associates. "Customers who use these facilities are very pleased with the quality of the service they receive and the ease and convenience of using these garages."

Exxon stations follow independent garages in overall satisfaction. Exxon particularly excels in initiating service with their customers.

Cadillac, Infiniti and Jaguar also rank high in the study. "High touch" customer service is a common theme among these dealerships, including "hands-on" service advisors, honest and courteous customer treatment, and quick, knowledgeable responses to questions and service requests.

In the non-luxury ranks, the most loyal customers are at Saturn dealers, retaining 73 percent of customer-paid service, and also showing the highest service satisfaction among non-luxury dealerships.

"Dealerships retain much of their business, primarily as a result of completing more difficult repairs," said Harbicht. "Yet, many dealers are facing capacity challenges due to record sales in the past year and aftermarket facilities gain share of customer dollars by addressing these needs."

Aftermarket facility gains result from the ability of customers to easily gain access for service. Jiffy Lube has the largest number of defectors from dealerships, with 14 percent of non-dealer service, due primarily to the facility’s high level of convenience.

The study, based on responses from more than 41,000 owners of 1997 model-year vehicles, is designed to provide automotive service organizations with valuable, relevant information to assist them in retaining customers. The research integrates information from the 2001 Customer Service Index (CSI) Study.