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Depressed Sales Could Hurt Dealer Service Business For Years

February 24, 2010
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

2010 Buick LaCrosse

2010 Buick LaCrosse

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'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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