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Drop in service levels hits dealer parts profits

Franchised dealers' service and parts revenue from cars up to four years old has collapsed due to extended servicing schedules, according to the latest Castrol Car Service & Customer Satisfaction Trend Tracker.

It revealed that the number of drivers yet to service their cars in the sub four-year-old category had doubled since 1994. Consequently, dealer retention levels in this sector, though still dominant over independents, have fallen.

Dealers, though, have enjoyed increased business from 4-9 year-old cars at the expense of the DIY sector. Despite the improvement, penetration into the older sector is not happening quickly enough to offset falling parts and labour revenue.

The average age of cars serviced by dealers has risen slightly over the past four years, from 4.01 in January 1997 to 4.13 in January 2001.

Dealer networks have shrunk, which has increased the amount of sub four-year-old cars at each outlet – none of which require much service and repair work. This makes it more difficult to find the time and resources to tackle the older market.

Franchised dealers for German marques tend to perform best on service retention across all car ages. BMW, Mercedes-Benz and Audi dealers head the list, followed by Toyota, Honda and VW. Mazda, Suzuki, Mitsubishi and Renault dealers also figure highly.

Customer satisfaction improves as cars get older, suggesting that independents offer a higher standard of service than dealers. The report, however, adds that “expectations are probably lower with older vehicles and this is bound to influence the rating”.

In general, satisfaction across all types of service/repair outlet is high. In the franchise sector, retailers for Volvo and all the Japanese marques are performing particularly well, with ratings close to 90%. The Fiat group, however, lags behind with a satisfaction rating just above 80%.

The report says: “Higher satisfaction ratings at the independent sectors do not necessarily mean better quality servicing – something that consumer lobbying bodies do not always take on-board.”

It claims that price is “usually directly related to customer satisfaction” - short-term, cheap repairs satisfy short-term needs, but may prove unsatisfactory long-term, compared to a more expensive solution.

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