J.D. Power and Associates Reports: Overall Satisfaction with Dealer Service Increases Due to Both Improved Dealer Performance and Vehicle Quality

Jaguar Ranks Highest in Customer Satisfaction with Dealer Service for a Second Consecutive Year

WESTLAKE VILLAGE, Calif., July 17 -- Overall customer satisfaction with dealer service improves considerably in 2008 -- with more than two-thirds of the 37 ranked brands demonstrating gains -- according to the J.D. Power and Associates 2008 Customer Service Index (CSI) Study(SM) released today.

The study, now in its 28th year, measures satisfaction among vehicle owners who visit the dealer service department for maintenance or repair work during the first three years of ownership, which typically represent the majority of the vehicle warranty period.

After remaining relatively flat since 2005, overall satisfaction with dealer service increases to 882 on a 1,000-point scale in 2008 -- an improvement of 6 points from 2007. The improvement is primarily due to a combination of an increase in the proportion of maintenance work performed and improvements in satisfaction with repair work. Customers who visit the dealer for routine maintenance tend to be more satisfied (894), on average, than are repair customers (862). The proportion of customers bringing their vehicles to the dealer for repair work has declined to a historic low in 2008, averaging 35 percent. Customer satisfaction with repair work increases notably -- improving by 9 points since 2007 -- with gains made by both premium and non-premium brands. However, satisfaction with maintenance work increases only slightly in 2008.

"Improved levels of vehicle quality have led to a decline in the need for vehicle repairs during the first three years of ownership," said David Sargent, vice president of automotive research at J.D. Power and Associates. "Despite the fact that the majority of service visits -- 65 percent -- are for maintenance work, dealers are very focused on the need to satisfy their repair customers. Given today's market conditions -- where dealers are finding it extremely difficult to achieve profitability -- it is vital that they not overlook the importance of ensuring their service customers are satisfied. Not only does meeting and exceeding the expectations of customers through after-sales service result in increased likelihood that those customers will return for service, but it also results in increased likelihood that those customers will stay loyal to the brand when they are next in the market for a vehicle."

For a second consecutive year, Jaguar ranks highest in customer satisfaction with dealer service. Jaguar achieves an overall CSI score of 923 and is closely followed in the rankings by Cadillac (922) and Buick (919).

"Jaguar dealers receive very high satisfaction scores among repair customers, particularly in the service initiation, service advisor and user-friendly service measures," said Sargent. "Cadillac improves by one rank position in 2008. This is also attributable to its particularly high levels of satisfaction among repair customers. Buick has strong performance among non-premium brands, and its continuing efforts to improve quality have resulted in a decreasing incidence of repair visits among the brand's customers."

The study also finds that communicating with customers after service work has been completed has a notably strong impact on satisfaction particularly through increasing customer perceptions of fairness of charges and the value of service received. For customers that receive an explanation of work performed or an explanation of charges, satisfaction is approximately 100 points higher, on average, than if no explanations were provided. Approximately 82 percent of customers report that they received explanations of the work performed on their vehicle, while 58 percent say they received an explanation of charges, when necessary.

"Many times, it is the quality of communication provided by service personnel that makes the difference between a satisfied customer and a true advocate," said Sargent. "When customers are provided with clear explanations as to why the work performed on their vehicle was necessary, as well as the reasoning behind the charges, it improves satisfaction with the value of the work performed, as well as perceptions of the fairness and honesty of the dealer. Consistently following these relatively simple steps helps to foster trust among customers, which is critical to building loyalty for future service work as well as future sales. For example, 78 percent of customers who rate the fairness of charges as 'outstanding' say that they will return to the dealership for routine maintenance after the warranty expires, while only 49 percent of customers who provide 'average' fairness ratings say the same."

The study also finds the following key patterns:

-- While 5 percent of customers say that they would prefer to schedule their service visit with the dealer via the Internet, only 1 percent of customers actually do so. The vast majority of customers -- 74 percent -- call the dealership to schedule an appointment, while 25 percent of customers just drop in.

-- When vehicles are returned to the customer cleaner than they were when received by the dealer, satisfaction scores average 48 points higher than scores provided by customers whose vehicles showed no difference in cleanliness. However, there is a particularly large decline in satisfaction -- 202 points, on average -- if vehicles are returned less clean than when they were received.

-- Among customers who report speaking to a service advisor immediately upon arriving at the dealership, satisfaction scores average 927-224 points higher than among customers who say they waited more than 5 minutes to speak to a service advisor.

The 2008 CSI Study is based on responses from 87,302 owners and lessees of 2005 to 2007 model-year vehicles. The study was fielded between January and April 2008. J.D. Power and Associates measures dealer service in various countries around the world, including Australia, Canada, China, France, Germany, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, the Philippines, South Africa, Taiwan, Thailand and the UK.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.