UK franchised dealers have one of the worst loyalty rates in the world for retaining customers for service.
James Ward, general manager of business analysts GiPA UK, revealed statistics at the AM Focus on Aftersales Conference which showed that only 24% of customers stay within the dealer network in the UK. China, on the other hand, sees a fiercely loyal customer base with 61% of customers staying within the network for repairs.
The largest majority of customers in the UK go to independents which have a healthy 54% market share for servicing.
Ward said: “The trend isn’t looking good for franchised dealers – the independents are still king.”
In terms of hourly labour rates, the UK is still by far the most expensive, with an average £72 in comparison to £54.22 for the Europe G5 and £22.22 in Russia.
Despite prices being higher in the UK, according to GiPA’s statistics, pure cost was not the key decider in choosing where a customer went for a service. The key driver was confidence in the repair.
Ward also warned UK dealers that after acquiring a lot of post-warranty business, they are now looking to tempt customers away from franchised networks much earlier.
He said: “The independents are now aggressively going after customers within the three-year warranty period, advising them that their manufacturer warranty will not be invalidated by going outside the dealer network for repairs. A lot of dealers are battling this with discounted labour rates, service plans and extended warranty, but is it enough?”
One key area where dealers were winning back money, Ward said, was by selling parts to the independent sector, with 88% saying they were interested in doing so.
He said: “This activity has greatly increased over the last year and even though some would see it as selling to a competitor, it’s still money the dealer wouldn’t have otherwise seen.”