What’s New… (August 01, 2004)

CANADIAN AUTOMOTIVE DEALERS CAPTURE INCREASING SHARE OF SERVICE BUSINESS: J.D. POWER

Canadian automotive dealerships are becoming more successful at retaining service customers once the basic warranty period expires, according to the J.D. Power and Associates 2004 Canadian Customer Commitment Study. The study, which measures the service satisfaction and loyalty of owners of 2- to 12-year-old vehicles, finds that dealerships now account for almost one-half (48%) of the service occasions on 4- to 7-year-old vehicles-up from 41 percent in 1999. This gain has come at the expense of mass merchants (e.g., Canadian Tire, Sears, Costco and Wal-Mart) and auto specialists (e.g., Midas, Speedy, Mr. Muffler), which each lost a 1 percent share of service occasions in this segment since 2003.

Firestone Service Centres recapture the top ranking for overall service experience satisfaction, having last held the position in 2000. Firestone performs particularly well in the areas of the appointment/check-in process, service advisor, work quality and customer orientation.

While customer satisfaction has improved slightly for the industry as a whole, satisfaction with quick-lube providers has fallen 6 index points over 2003, with ratings declines particularly in the areas of work quality and after service. This erosion in satisfaction could be a function of the changing service mix at these establishments. While lube oil/filter jobs include up to 83 percent of the work at quick-lube establishments in 2003, this has dropped to 80 percent in 2004.

“A changing work mix has affected the dynamics of service activity at diversified quick lubes, which is bound to impact the nature of interaction with customers,” said Lobo. “The challenge for quick lubes, as well as the automotive service industry as a whole, is to constantly strive to meet ever-changing customer expectations. Customer mindsets are geared to a particular type of experience, depending on the establishment, and managing these expectations is crucial to ensuring satisfaction and loyalty in the long run.”

The 2004 Canadian Customer Commitment Study is based on responses from 17,700 owners of 2- to 12-year-old vehicles who were surveyed in December 2003 and April 2004.

ONTARIO GOVERNMENT ANNOUNCES APPRENTICESHIP INITIATIVES

Ontario’s Liberal government has announced initiatives designed to bolster participation in apprenticeship programs. Three apprenticeship programs are designed to help more young people succeed in today’s knowledge-based economy, declares Mary Anne Chambers, Minister of Training, Colleges and Universities.

“Improving access to apprenticeship training strengthens our ability to respond to increasing demand for skilled workers and keeps our economy strong and competitive,” said Chambers.

“An Apprenticeship Training Tax Credit would be a cornerstone of our plan to increase both the quality and quantity of skilled labour, including trades people, in this province,” said Greg Sorbara, Minister of Finance. “Our investment in apprenticeship will address the expected wave of retirements in skilled trades, and help build a strong and prosperous economy.”

To strengthen the apprenticeship system, the Ontario government is:

Creating 1,500 scholarships of $1,000 each to high school students who had quit school, then returned to complete high school and enter apprenticeships, and a $2,000 bonus for employers to encourage them to hire these young people into skilled trades;

Investing up to $6 million in 2004-05 to create new Co-op Diploma Apprenticeship Programs that will enable young people to train as apprentices in a specific trade while obtaining an associated college diploma; and

Developing an Apprenticeship Training Tax Credit that, if passed by the legislature, would provide refundable tax credits for employers on a portion of the salaries and wages paid to eligible apprentices.

The programs are part of the Ontario government’s four-year strategy to transform the skills training and apprenticeship system and complement the annual investment of $11.7 million, by 2006-07, which will expand the number of people registered in apprenticeships to 26,000 by the following year.

FORD STARTS PRODUCTION OF WORLD’S FIRST HYBRID SUV

Ford has launched production of the Escape Hybrid, the first hybrid vehicle to be built in North America. According to Ford CEO Bill Ford, “Escape Hybrid is our first production vehicle aimed at mainstream customers powered by anything other than an internal combustion engine.” The US Environmental Protection Agency certified fuel economy numbers that put the front-wheel-drive Ford Escape Hybrid at 36 mpg in the city and 31mpg on the highway – the highest fuel economy numbers ever certified for an SUV.

Ford plans to produce about 20,000 Escape Hybrids during in its first full year. Its four-cylinder engine combines with an electric drive system to deliver acceleration performance similar to that of the V-6 Ford Escape.

While a conventionally powered vehicle burns fuel and creates emissions while idling in stopped traffic, the Escape Hybrid’s engine shuts down to conserve fuel. The electric generator can smoothly start the gasoline engine in less than 400 milliseconds, without the increased emissions produced when starting a conventional engine.

As a result the Escape Hybrid is a clean vehicle to operate, producing 97% less hydrocarbon and oxides of nitrogen emissions than vehicles that meet the current Tier I emissions standard. Ford said that the hybrid version of the Escape will cost around $US 3,300 more than the standard model.

U.S. CLASS ACTION CLAIMS HONDA FIRES DUE TO DEFECT

In the wake of a spate of vehicle fires, a class action suit has been filed in Los Angeles on behalf of Honda CR-V owners. According to published reports in The Washington Post, at least 27 2003 and 2004 Honda CR-V SUVs have burst into flames shortly after obtaining their first oil change. Honda is maintaining that the problem is not due to a design defect. Instead, Honda maintains that if the new oil filter is not installed properly, oil can leak around it and cause the fires. The company has issued a warning to its dealers and plans to send information to independent service facilities as well, regarding the need to be careful in replacing oil filters. The class action lawsuit, filed in Los Angeles, Calif., Superior Court, alleges that the fires have erupted due to defective o-ring gaskets that permit the oil to leak onto the vehicles’ hot exhaust systems, causing the vehicles to burst into flames. The U.S. National Highway Traffic Safety Administration (NHTSA) has not forced a safety recall in regard to the alleged problem.