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Depressed Sales Could Hurt Dealer Service Business For Years

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2009 HUMMER H3T

2009 HUMMER H3T

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The depressed auto sales trend that began back in 2008 is going to leave some lingering effects, affecting the service department business of new-car dealerships for many years.

So predicts J.D Power and Associates—that dealer service traffic will decline by 20 percent between 2009 and 2013, with a 25-percent drop in service dollars from late-model (2005-2009) vehicle owners. As most new-car dealerships are dependent on after-sales service to stay profitable, and a sales recovery is predicted to be slow, dealers could be experiencing hard times for at least the first half of this decade.

That was a grim, albeit interesting, side story accompanying the release of the market-research firm's annual Customer Service Index (CSI) study, which looks at five measures over the three years following purchase of the vehicle: service quality, service initiation, service advisor, service facility, and vehicle pick-up.

On the bright side, overall satisfaction with dealer service has risen for the tenth consecutive year, Power reported.

2009 Saturn Aura

2009 Saturn Aura

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2010 Buick LaCrosse

2010 Buick LaCrosse

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Meanwhile, Hummer, which looks headed for extinction after today's announcement from GM, ranked the highest among mass-market brands in the CSI. Among luxury brands, Lexus ranked highest, with the brand's boutique-style dealership approach to service still paying dividends.

Cadillac, Jaguar, Acura, and BMW were other top-performing luxury brands, in terms of post-sales service at the dealership, while Saturn, Buick, Chevrolet, and MINI rounded out the top five for mass-market brands. Lexus, along with Hummer, Saturn, and Buick, earned JDPower.com's top ratings for customer service.

Versus last year, Kia and Volkswagen were the most improved mass-market brands.

Suzuki ranked a distant last place—a sign that all still isn't well with its dealerships—and Mazda and Jeep were also very low-scorers. Volvo was the lowest-ranked luxury brand for post-sales service.

[J.D. Power and Associates]

 
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