Canadians Scrimping On Car Maintenance, Dealer Share Down
J. D. Power and Associates research results show that Canadians spent less on car repairs this year than they did last year, and put hard numbers to industry assumptions that car owners in this countr...
J. D. Power and Associates research results show that Canadians spent less on car repairs this year than they did last year, and put hard numbers to industry assumptions that car owners in this country are putting off maintenance.
According to the J. D. Power and Associates 2009 Canadian Customer Commitment Study, average annual expenditures on vehicle maintenance and repair services have declined by approximately seven per cent from 2008.
The study found that average annual spending on vehicle maintenance and repair services declined to $856 in 2009, from $920 in 2008. Further, the proportion of customers who say they “go to the cheapest place I can find for service” has increased to 23 per cent, from 17 per cent in 2008.
“In a difficult economy, vehicle owners seem to be delaying what they perceive to be non-essential maintenance or seeking out the lowest-cost option,” said Darren Slind, senior director and Canadian automotive practice leader at J. D. Power and Associates. “In the long run, this may prove more costly in terms of vehicle reliability, but in the short term, consumers are dealing with other spending priorities.”
The study also finds that new-car dealers continue to lose market share to aftermarket service providers. Overall, aftermarket providers now account for 59 per cent of the estimated $11.2 billion annual service market for vehicles that are between three and 12 years old, up from 57 per cent in 2008.
“While a two-percentage-point shift may not seem substantial, this equates to more than $220 million in lost revenue annually for dealers,” said Slind.
“Given declining new-vehicle sales — which are down more than 16 per cent in Canada so far this year — dealers must rely more than ever on their service and parts operations. We expect that dealers will fight back aggressively in the coming year to recapture this lost market share.”
The study, redesigned for 2009, provides a measure of the service behaviours, satisfaction and loyalty of owners of three-to 12-year-old vehicles. Overall customer satisfaction is determined by examining five key factors of the service experience: the process of getting the vehicle in for service; service advisor performance; service facility; quality of work performed; and the process of vehicle return/pick-up. The study examines customer satisfaction with service at both new-car dealerships and aftermarket facilities.
In addition to reports of declining expenditures, the study also names those survey providers who performed best in the eyes of the consumer.