J.D. Power and Associates Reports: Canadian Automotive Dealers Capture Increasing Share of Service Business after Basic Warranty Expires

TORONTO--Aug. 5, 2004--

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Firestone Service Centres Rank Highest in Satisfying Automotive Service Customers

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Canadian automotive dealerships are becoming more successful at retaining service customers once the basic warranty period expires, according to the J.D. Power and Associates 2004 Canadian Customer Commitment Study(SM) released today.

The study, which measures the service satisfaction and loyalty of owners of 2- to 12-year-old vehicles, finds that dealerships now account for almost one-half (48%) of the service occasions on 4- to 7-year-old vehicles -- up from 41 percent in 1999. This gain has come at the expense of mass merchants (e.g., Canadian Tire, Sears, Costco and Wal-Mart) and auto specialists (e.g., Midas, Speedy, Mr. Muffler), which each lost a 1 percent share of service occasions in this segment since 2003.

"With new-vehicle sales slowing down over the past two years, attention has shifted to the fixed operations at dealerships in an attempt to retain more service revenue," said Rohan Lobo, manager of research projects at the J.D. Power and Associates office in Toronto. "However, dealerships still have work to do to keep from losing customers to aftermarket service providers, particularly as vehicles from the peak sales period are now coming off their basic warranties. While customers consistently rate dealerships highly for having well-trained technicians, dealerships lag the aftermarket in the 'human' aspects of customer handling, which is the key to retention."

Firestone Service Centres recapture the top ranking for overall service experience satisfaction, having last held the position in 2000. Firestone performs particularly well in the areas of the appointment/check-in process, service advisor, work quality and customer orientation.

While customer satisfaction has improved slightly for the industry as a whole, satisfaction with quick-lube providers has fallen 6 index points over 2003, with ratings declines particularly in the areas of work quality and after service. This erosion in satisfaction could be a function of the changing service mix at these establishments. While lube oil/filter jobs include up to 83 percent of the work at quick-lube establishments in 2003, this has dropped to 80 percent in 2004.

"A changing work mix has affected the dynamics of service activity at diversified quick lubes, which is bound to impact the nature of interaction with customers," said Lobo. "The challenge for quick lubes, as well as the automotive service industry as a whole, is to constantly strive to meet ever-changing customer expectations. Customer mindsets are geared to a particular type of experience, depending on the establishment, and managing these expectations is crucial to ensuring satisfaction and loyalty in the long run."

The 2004 Canadian Customer Commitment Study is based on responses from 17,700 owners of 2- to 12-year-old vehicles who were surveyed in December 2003 and April 2004.