Automobile Dealer Magazine

Japanese Vehicle Service is Different: Part 1

by Ed J. Kovalchick

Recently, we had the good fortune to be selected by a Japanese dealer group with 96 dealerships for the purpose of helping them analyze and improve service operations. Our first trip to Japan was full of surprises which demonstrated some of the vast differences worldwide in automobile servicing.

Dealerships in Japan are very similar to dealerships in the United States in the 1950's. Most are small, with two or three car showrooms and five to seven service stalls. Large dealerships will feature five or six vehicles in the showroom. Their entire philosophy is to serve the customer first and almost every employee in sales and service is on a salary-only pay plan.

Each operation concentrates on a surrounding community or market area. Sales and service operations are not necessarily located together, and with the methods used for serving the customer, their immediate proximity appears to not be necessary at all. Most noteworthy were the large independent shops located in each market area. These shops were often larger than the dealer shop serving the community. We discovered no mass merchandising service centers of any sort.

A survey we conducted revealed that Japanese car owners were extremely loyal to their vehicle maintenance needs, but not necessarily to the dealership service department. Various services are performed every six months, regardless of mileage, and the primary reminder system is telephone calls from dealers or from the independent shops. There is no service interval that consists of a lube, oil, filter service only (same as in Europe) and vehicles were generally being driven much more than 3,000 miles between oil changes.

The loyalty to vehicle maintenance needs results from years of government mandates for vehicle service. A six-month inspection and certification has been mandatory for years. Every twenty-four months, a major inspection and service costing as much as $500 is also mandatory. Just last year, these mandatory inspections were minimized considerably, but, so far, Japanese service customers appear to have maintained the same six-month habits.

After phone contact from a dealer or independent service shop is made, a service appointment day is established. The primary method for getting the vehicle to the service shop is the technician picking up the vehicle. A very nominal charge is made for this costly service. This is one of several reasons why Japanese technicians were not as productive as those in the States. The upside of this procedure is that the technicians personally discuss customer concerns with the customer and vehicles seemed to be fixed right the first time.

All service advisors are certified technicians (four certifications are required) and the communication between advisors and technicians was excellent, since every advisor had formerly worked in the shop for at least several years.

In the next issue we will discuss in more detail how the Japanese service operations function, including a unique parts department strategy.

Ed J. Kovalchick is the President/CEO of Net Profit, Inc., an international fixed operations consulting and training firm for automotive dealerships and manufacturers located in Alabaster, AL. He is a former six franchise Automobile Dealer.