SINGAPORE: 29 July 2016 — The rapid pace of change in the Philippines automotive market – booming car sales and fast-changing consumer profiles – requires automakers and their dealers to scrutinize and refine their network strategies as satisfaction levels falls to the lowest levels since 2012, according to the J.D. Power 2016 Philippines Customer Service Index (CSI) Study SM released today.
The study, now in its 16th year, measures new-vehicle owner satisfaction with the after-sales service process at an authorized service center by examining dealership performance in five factors (in order of importance, updated in 2016): service quality (29%); service initiation (26%); vehicle pick-up (17%); service facility (14%); and service advisor (14%). Brand service performance is measured on a 1,000-point scale, with a higher score indicating higher customer satisfaction.
Overall service satisfaction averages 822 points this year, down from 837 points in 2015 with declines recorded across all customer service factors. In particular, satisfaction with service facility suffers the greatest drop of 24 points year-on-year, indicating that the large influx of customers into the service centers is straining capacity.
“Despite more service reminders being sent to customers for routine maintenance, customers are not reciprocating by making appointments for their service visit,” said Loïc Pean, senior manager at J.D. Power. “We still see six in 10 walk-in customers and this exacerbates the capacity crunch at the dealerships. Dealerships have to be resolute to educate their customers to get into the habit of making appointments else it will be a formidable task for dealers to manage unscheduled workload and maximize throughput.”
Adding to the complexity of the business environment are the dramatic shifts in customer demographics. Nearly three-fourths (72%) of customers are first-time new-vehicle owners, up from 49% in 2015. The percentage of younger car owners (under 40 years) has also increased to 62% in 2016, compared with 52% in 2015. In addition, women constitute a larger proportion of new-vehicle owners this year at 43%, up from 31% last year.
“As these changes happen in a fairly short span of time, dealers need to continually stay a step ahead to anticipate the changes so as to effectively address the multi-faceted needs of the younger generation. Those who are successful in meeting customers’ expectations will reap the rewards of higher advocacy and loyalty,” said Sigfred Doloroso, country manager at J.D. Power.
Among customers who are highly satisfied with their dealer service (overall satisfaction scores of 870 and above), 59% say they “definitely would” return to their dealer for post-warranty service and 62% “definitely would” recommend their dealer to friends and family. In contrast, among customers who are less satisfied (scores of 774 and lower), only 44% say they “definitely would” return to the dealer for post-warranty service, and only 48% say they “definitely would” recommend the dealer to others.
Among the 11 mass market brands ranked, Mazda performs highest for the first time since the study’s inception, with a CSI score of 845. Mazda performs particularly well in all five CSI factors. Honda ranks second (831), followed by Nissan in third (827).
Following are additional key findings of the study:
- Customers Are Waiting Longer at Every Service Juncture: The vehicle handover process time has increased by 5 minutes from 2015. Nearly half (49%) of customers say it took 4 hours or more to get their car serviced, up from 39% in 2015. Even the time taken to finish the paperwork and pick up the vehicle after service has increased, as 63% of customers say this process took more than 10 minutes, up from 49% in 2015.
- Service Initiation Is Critical to Overall Satisfaction: Service initiation gains in importance in the study and accounts for 26% of overall satisfaction, yet it is the lowest-scoring factor in the study. Trying to arrange a service visit with ease is the main pain point for customers.
- Fewer Customers Are Contacted To Check If They Are Satisfied: Only one third (34%) of customers are contacted after service to check if the work was performed up to their satisfaction. The incidence rate of this follow-up work has come down significantly from last year (45%).
The 2016 Philippines Customer Service Index (CSI) Study is based on responses from 1,838 new-vehicle owners who purchased their vehicle between February 2014 and May 2015 and took their vehicle for service to an authorized dealer or service center between August 2015 and May 2016. The study was fielded between February and May 2016.