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Automobile industry

Dealerships Improve Customer Satisfaction, But Challenges Remain

Strategic Insights

— 1 min read

A survey by J.D. Power and Associates found that new-car salespeople are generally doing a better job of making customers happy, with General Motors and Ford Motor Co. brands scoring particularly high. The survey, which marks the fourth straight year of improvement, credits the recession and downturn in vehicle sales for forcing salespeople to work harder to close deals with attractive prices and other inducements. Despite the progress, challenges persist, with over half of buyers walking out of dealerships due to sales pressure or rude treatment, and many opting for a different brand.

Key Takeaways:

  • The survey found that 29 of 38 brands scored higher this year than last in terms of customer satisfaction with the sales process, price, and delivery of the vehicle.
  • General Motors' Buick, Pontiac, Chevrolet, Saturn, Hummer, and GMC dealers scored well above average among mass-market brands, outperforming dealers from Honda and Toyota.
  • Jaguar scored highest among luxury brands, followed closely by Cadillac, Lexus, and Mercedes-Benz.
  • Over 50% of buyers who experience poor treatment or pressure at dealerships opt for a different brand, resulting in significant losses for both the dealer and carmaker.
  • Strong franchise laws protect dealers but also make it difficult for manufacturers to remove underperforming dealerships.
  • Manufacturers can exert pressure on dealers by threatening to begin the removal process, but this can be a lengthy and uncertain process.

Statistics:

  • The survey found that 29 of 38 brands scored higher this year than last in terms of customer satisfaction.
  • New-car sales declined from over 16 million two years ago to a projected 10-10.5 million this year.
  • 50% or more of buyers who experience poor treatment or pressure at dealerships opt for a different brand.
  • Salespeople are doing a better job than ever of making customers happy with attractive prices and other inducements.

Sources:

  • Jonathan Osborn, Director of Automotive Research at J.D. Power and Associates.
  • Jack Gillis, Author of "The Car Book" and Spokesman for the Consumer Federation of America.
  • Leonard Bellavia, Mineola lawyer who represents many auto dealers.
  • Newsday, Melville, N.Y., Copyright (c) 2009.

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