Study: Coronavirus Impact on Industry
March 12, 2020—As the coronavirus crisis continues to interrupt global supply chains, parts shortages could undermine hard-fought gains made in customer satisfaction over the past few years. According to the J.D. Power 2020 Customer Service Index (CSI) Study, overall satisfaction increases to 837 (on a 1,000-point scale), marking the fifth consecutive year of increasing satisfaction. As the crisis unfolds, however, the ability to meet customer expectations for prompt service and repairs will be undermined.
“There’s no telling how widespread or long lasting the ripple effect of the coronavirus will be for the automotive industry, but it inevitably will have a financial effect on dealers’ service business,” said Chris Sutton, vice president of the U.S. automotive retail practice at J.D. Power. “Automakers and dealers need to prioritize securing sources for their parts supplies or face the consequences of losing business. Customers will be initially understanding of coronavirus consequences, but shortages will continue well beyond the current public health crisis. Customers will not understand in August, for example, why there are no parts to repair their vehicles.
“Performing work right the first time is the most critical activity for service satisfaction, and dealers now do a good job by successfully completing work 94 percent of the time,” Sutton said. “Under normal circumstances, 20 percent of the work that isn’t completed the first time is due to parts being unavailable, which is a source of frustration for customers. That 20 percent could dramatically increase due to parts suppliers’ extended shutdowns in China and other locations. When parts are unavailable, customer satisfaction and intended loyalty significantly decline.”
Overall satisfaction declines 155 points among luxury vehicle owners when parts are unavailable. There’s a 141-point drop in satisfaction among owners of mass market vehicles when parts are unavailable. What this decline means, in business terms, is a drop from 63 percent to 30 percent of owners in the luxury segment who say they “definitely will” return for service. That drop is down to 26 percent from 58 percent in the mass market segment.
The study measures satisfaction with service at a franchised dealer or independent service facility for maintenance or repair work among owners and lessees of one- to three-year-old vehicles. It also provides a numerical index ranking of the highest-performing automotive brands sold in the United States, which is based on the combined scores of five different measures that comprise the vehicle owner service experience. These measures are (in order of importance) service quality (27 performance); service initiation (20 percent); service advisor (20 percent); service facility (17 percent); and vehicle pick-up (16 percent).
For more information about the U.S. Customer Service Index Study, visit http://www.jdpower.com/resource/us-customer-service-index-study.