Study: Dealers Lag Aftermarket Shops In Canadian Auto Service Market

Sep 29, 2019

Although auto dealers in Canada receive 54% of revenue spent on servicing 4-year-old to 12-year-old vehicles, they continue to lag aftermarket service facilities in share of visits (48% vs. 52%), according to the 2019 Canada Customer Service Index Long-Term Study from J.D. Power.

The study measures satisfaction and intended loyalty among owners of vehicles that are 4-years old to 12-years old and analyzes the customer experience in both warranty and non-warranty service visits. Overall satisfaction is based on the following factors (in order of importance) …
• Service initiation (24%).
• Service quality (23%).
• Service advisor (20%).
• Service facility (17%).
• Vehicle pick-up (16%).

The study is based on responses from 8,815 vehicle owners and was fielded between March and June 2019.

NAPA AUTOPRO ranked highest in overall customer satisfaction with a score of 811 on a 1,000-point scale. The next highest-ranking aftermarket chains were Great Canadian Oil Change at 775 and Jiffy Lube at 769. The industry average score was 779.

Volkswagen had the highest-ranking dealerships at 791 followed by Toyota dealerships at 789.

In an industry estimated to generate CA$10 billion annually, dealerships average CA$323 per visit compared to CA$222 for aftermarket facilities. However, while customer visits to dealerships were flat year-over-year (1.3 visits), visits to aftermarket facilities increased from 1.5 in 2018 to 1.6 in 2019.

“Considering the sheer size of the auto service market for maintenance and repair, any fraction gained in market share translates into millions in potential revenue that auto dealers are leaving on the table,” said Virginia Connell, automotive research and consulting manager at J.D. Power Canada. “As vehicles age and require more complex and costly repairs, aftermarket service is doing a better job at attracting and retaining customers, especially as warranties start to expire, consequently capitalizing on the more revenue-lucrative repair work.”

According to the study, Canadian vehicle owners start to favor aftermarket shops over dealers when their vehicle is between 4 years old and 7 years old. Furthermore, while dealers have a slight advantage in customer satisfaction when it comes to pure maintenance (787 vs. 782), aftermarket service facilities have higher overall satisfaction than dealers (783 vs. 775) and higher satisfaction with repairs (791 vs. 759).

Some additional findings from the study …
• Aftermarket providers do a better job of greeting customers immediately than do dealers (51% vs. 35%).
• Dealers are more likely to return vehicles cleaner (33% vs. 9%).
• Aftermarket customers “definitely will” recommend a facility 52% of the time after maintenance work, compared with 39% for dealers. The gap for repair work is even wider (57% vs. 34%).
• Satisfaction is highest when customers receive and accept recommendations for additional service work from their service advisor.
• Tablets boost acceptance rates of work recommendations when used to list specific details of the issue (59%), provide a cost estimate (57%), access service history (57%) and show a menu of available options (56%).

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