For car manufacturers, improving business performance could be achieved by winning new customers with more reliable, exciting and fuel-efficient vehicles. However, this task might take several years of comprehensive studies, experiments and production without absolute assurance in the end as consumer behavior is rapidly changing. Behind the industry’s developments and uncertainties, one perfect way for automakers to drive progress is to focus on existing customers, converting the regular buyers into die-hard fans by providing them with exceptional after-sales services.

Car owners are more willing to buy the same car brand if they receive excellent after-sales services from the dealer. Considering this fact, automotive companies have also focused on winning the heart of their customers with fast and efficient after-sales services.

In the Philippines, customer satisfaction with after-sales service at authorized automobile service centers has dropped. This is according to the findings of the 2017 Philippines Customer Service Index Study conducted by global market research company J.D. Power, in which car brands that excel at after-sales customer satisfaction in the country are identified.

The study is based on the responses of 1,951 new vehicle owners who purchased their vehicle between February 2015 and May 2016 and took their vehicle for service to an authorized dealer or service center between August 2016 and May 2017. The study is held annually since 2001 to measure satisfaction among vehicle owners who visit an authorized dealership service center for maintenance or repair work between the first 12 to 24 months of ownership.

The J.D. Power 2017 Philippines Customer Service Index Study revealed that the overall satisfaction for the industry has decreased by 29 points, compared with 822 in 2016, to an average of 793 on a 1,000-point scale. It is the lowest score since the study was launched, noting that the satisfaction has decreased across all five factors: service quality (29%); service initiation (26%); vehicle pickup (17%); service facility (14%); and service advisor (14%). Among the five factors, service initiation and vehicle pickup have scored the lowest at 787 each.

“The increased time spent handing over the vehicle before service — due to rapidly increasing service volumes — is one of the key reasons for the significant drop in service satisfaction,” Loïc Pean, senior manager at J.D. Power, was quoted as saying in a statement published on its Web site. “Service networks are not expanding as fast as market demand, which creates challenges for service centers to handle the increasing traffic within a reasonable time — in a very time-conscious market — while also maintaining high-quality service standards.”

The study showed that the percentage of service appointments has increased, but the time required to secure an appointment has also increased. 72% of the surveyed service customers said that it took them two or more days to get an appointment, with 30% indicating that they had to wait an average of nine minutes to speak to a service advisor. 41% of the customers said that it took them more than 30 minutes to complete the vehicle handover process starting from waiting time, conferring with the advisor, handing over keys up to completing any initial paperwork.

“As a consequence of these capacity issues, more pressure is placed upon dealer facilities and staff,” Sigfred Doloroso, country manager at J.D. Power, said. “This translates into a decrease of certain quality standards, which has a noticeable effect on customer satisfaction, such as providing accurate service cost and time estimates or the cleanliness of the vehicle on return. It is crucial that service advisors take more time to communicate with and offer advice and explanations on vehicle maintenance to each customer.”

Among the 11 mass market brands included in the JD Power 2017 Philippines Customer Service Index Study, Honda got the highest points when it comes to providing after-sales service satisfaction to its customers. It scored 803 after performing well in four of the five factors: service quality; vehicle pick-up; service facility and service advisor. Five other car brands that scored above the industry average are Hyundai (798), Mitsubishi (797), Mazda (795) and Toyota (795). They were followed by Isuzu (793), Kia (788), Chevrolet (786), Ford (785), Suzuki (777) and Nissan (772).

The automotive after-sales business has contributed significantly to the financial strength of the car manufacturers and dealers. As discussed in Automotive INSIGHT by an international management consulting firm, Arthur D. Little, in order for original equipment manufacturers (OEMs) to protect and develop their after-sales services, they need to become proactive business innovators. This could be done by adopting new business models, unlocking value in their value chain, maximizing efficiency, supporting their brand and enhancing the customer experience.

“OEMs’ after-sales business is coming under increasing pressure due to growing competition, legislative changes, a shift in focus towards emerging markets and the growing differentiation in customer requirements. All these represent a major risk for OE parts & services — one of the most profitable sources of today’s automotive business,” the firm said. “However, OEMs can transform this risk into an opportunity for growth by developing a robust after sales strategy.”

OEMs could begin the process by examining the disruptive after-sales business models which have the capacity to change the industry in the following years. “These new business models may become a threat to the traditional after sales strategies, but can also be a valuable growth generator for those OEMs who are able to make them part of their active strategies.”

Just like in other industries, technological trends cause transformational pressure in automotive sales and after-sales services. There are now plenty of ways to offer customers with tailored services before, during and after their purchasing decision. Digitization opens up an entirely new dimension for car manufacturers and dealers to interact with their customers.

According to global information and communications technology (ICT) services company, T-Systems, more than 80% of customers use social and digital media and web to search for vehicles and other related stuff. Car dealers have to adapt to these communication channels to make the information available to the customers.

“Information and offers in real time with no delay are crucial to the sales and after sales service. However, mobile solutions not only play a part in the process of purchasing automobiles — industry also benefits from this trend and is able to build on it,” T-Systems said on its Web site.

T-Systems also said that information technology (IT) must not be seen as a cost factor but as a tool to boost revenue growth because if correctly networked, it can provide customers with new digital ways of easier and convenient interaction starting from purchasing the car up to availing after-sales services. — Mark Louis F. Ferrolino