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CATA Bulletin
July 28, 2008

 

Tough times call for making most of best opportunities

November 16, 2010

 

Sales of new and used vehicles have fallen at most dealerships. There are many reasons and it really does no good to worry over the things that are beyond a dealer’s control. But there are many things that are well within his control.

Remember that Service Gross in most new-vehicle stores is 60 percent to 70 percent, and Parts Gross typically is 35 percent or greater. Dealers must optimize their top grossing departments, so this is not the time to be cutting back or laying off personnel in those areas.

Dealers ought to be selling more service operations to more customers for more gross. That can be achieved only if they have the best trained Service Managers who have the techniques and skills to generate maximum profits for the service department.

One method to achieve that is to enroll the store’s Service Manager in the CATA Service Manager Bootcamp. The next four-day Bootcamp is Sept. 23-26 in Oakbrook Terrace.

See the enrollment application in the print edition of this newsletter and guarantee a slot in the program by submitting completed forms to the instructors from NCM Associates.

The Chicago Automobile Trade Association covers most of the cost of the program. This is too good to pass up. Take advantage of it today.

 

Dealer service CSI up, new J.D. Power study finds

November 16, 2010

Overall customer satisfaction with dealer service has improved considerably in 2008—with more than two-thirds of the 37 ranked brands demonstrating gains—according to a J.D. Power and Associates study released this month.

The Customer Service Index Study, now in its 28th year, measures satisfaction among vehicle owners who visit the dealer service department for maintenance or repair work during the first three years of ownership, which typically represent the majority of the vehicle warranty period.

After remaining relatively flat since 2005, overall satisfaction with dealer service increased to 882 on a 1,000-point scale in 2008, an improvement of 6 points from 2007. The improvement primarily is due to a combination of an increase in the proportion of maintenance work performed and improvements in satisfaction with repair work.

Customers who visit the dealer for routine maintenance tend to be more satisfied (894), on average, than are repair customers (862). The proportion of customers takng their vehicles to the dealer for repair work declined to a historic low in 2008, averaging 35 percent. Customer satisfaction with repair work increased notably—up by 9 points since 2007—with gains made by both premium and non-premium brands. But satisfaction with maintenance work increased only slightly this year.

"Improved levels of vehicle quality have led to a decline in the need for vehicle repairs during the first three years of ownership," said J.D. Power’s David Sargent. "Despite the fact that the majority of service visits—65 percent—are for maintenance work, dealers are very focused on the need to satisfy their repair customers.

"Given today’s market conditions, where dealers are finding it extremely difficult to achieve profitability, it is vital that they not overlook the importance of ensuring their service customers are satisfied. Not only does meeting and exceeding the expectations of customers through after-sales service result in increased likelihood that those customers will return for service, it also results in increased likelihood that those customers will stay loyal to the brand when they are next in the market for a vehicle."

For a second straight year, Jaguar polled the highest CSI, with an overall score of 923. Cadillac (922) and Buick (919) followed in the rankings.

The study also finds that communicating with customers after service work is completed strongly impacts satisfaction, particularly by increasing customer perceptions of fairness of charges and the value of service received. For customers who receive an explanation of work performed or an explanation of charges, satisfaction is about 100 points higher, on average, than if no explanations were provided.

About 82 percent of customers report that they received explanations of the work performed on their vehicle, while 58 percent say they received an explanation of charges, when necessary.

"Many times, it is the quality of communication provided by service personnel that makes the difference between a satisfied customer and a true advocate," said Sargent. "When customers are provided with clear explanations as to why the work performed on their vehicle was necessary, as well as the reasoning behind the charges, it improves satisfaction with the value of the work performed, as well as perceptions of the fairness and honesty of the dealer.

"Consistently following these relatively simple steps helps to foster trust among customers, which is critical to building loyalty for future service work as well as future sales. For example, 78 percent of customers who rate the fairness of charges as ‘outstanding’ say that they will return to the dealership for routine maintenance after the warranty expires, while only 49 percent of customers who provide ‘average’ fairness ratings say the same."

Other findings of the study:

• While 5 percent of customers say that they would prefer to schedule their service visit with the dealer via the Internet, only 1 percent of customers actually do so. The vast majority of customers—74 percent—call the dealership to schedule an appointment, while 25 percent of customers just drop in.

• When vehicles are returned to the customer cleaner than they were when received by the dealer, satisfaction scores average 48 points higher than scores provided by customers whose vehicles showed no difference in cleanliness. And there is a particularly large decline in satisfaction—202 points, on average—if vehicles are returned less clean than when they were received.

• Customers who report speaking to a service advisor immediately upon arriving at the dealership offer average satisfaction scores of 927—224 points higher than among customers who say they waited more than five minutes to speak to a service advisor.

The 2008 CSI Study is based on responses from 87,302 owners and lessees of 2005 to 2007 model-year vehicles. The study was fielded between January and April 2008.

 

Northwood University taking names for Dealer Education Award

November 16, 2010

Dealer principals who have made noteworthy contributions to education—public or private, on any level, inside or outside the industry—could be candidates for a Northwood University Dealer Education Award.

The award has been presented annually since 1972 at the National Automobile Dealer Association convention. Next year’s winner will be named Jan. 26 in New Orleans. The nominee must be a dealer principal and should be present to accept the award.

Northwood University President Keith Pretty said award winners "are people of stature. The award is recognition of substantial dedication over a number of years to the educational process and the field of automotive marketing."

Nominations must be returned to Northwood’s Midland, Mich., campus, postmarked by Sept. 1. For a nomination form, see the Northwood Web site at www.northwood.edu/forms/dea. Or, call the CATA’s Erik Higgins at 630-495-2282.

 

Myths about getting better fuel mileage debunked

November 16, 2010

Wacky theories proliferate as pump prices rise
 

As the price of gasoline escalates, strategies mount on how to squeeze out the most fuel economy. But not all the theories making the rounds are true.

There are plenty of legitimate ways to stretch mileage—slow down, keep tires at proper inflation, avoid quick acceleration, limit luggage on a roof rack, and use a properly fitted gas cap.

But many more myths are circulating too, claims which were tested by car experts at the Automobile Club of Southern California and Consumer Reports magazine.

Fill up in the morning
The theory is that gas expands in warm weather, so people who visit the gas station early in the day, when the temperature is cooler, get denser fuel that contains more energy per gallon. In other words, fill up when it’s cool to get more bang for your gasoline buck.

There’s nothing wrong with the theory, except this: Gas station storage tanks are so well-insulated these days that outside temperature has little effect.

"The key thing is the temperature of the gas when the tanker truck leaves it at the gas station," said Steve Mazor, manager of the auto club’s research center. "If it’s hot, it will stay hot, and vice versa."

No matter what time of day consumers fill up.

Change your air filter
The test team at Consumer Reports was sure that a car would get better mileage with a clean rather than a dirty air filter.

"It stands to reason that if the air is allowed to flow freely, it would result in better fuel economy," spokesman Douglas Love said.

To do the test, the team used duct tape to partially cover the air intake, simulating a dirty filter. And the result? "We were surprised to find out it didn’t much matter," Love said. "The mileage was about the same."

So testers added a bit more tape and then some more. Short of blocking off all the air, they got the same results.

"We found that the onboard computers that adjust the fuel mixtures on recent cars did a surprisingly effective job," he said.

The auto club ran a test with clean and dirty fuel filters on several different cars, and results were similar.

"There was even one test where the mileage got a little bit better—maybe 1 percent or 2 percent—with the dirty filter," Mazor said.

But before drivers start to count any money saved on air filters, there is a price to pay. "The trade-off was that carbon monoxide emissions went up," he said.

Turn off the car’s a/c
Anyone who had a car with air conditioning before 1980 or so can recount the burden the cooling device placed on the engine, especially in a small car. Turn on the a/c, and suddenly you’d have to step on the gas or even shift gears to get back up to speed.

To make matters worse, it was thought that driving with the windows down would generate drag that also would cut into mileage. But not so much anymore, especially at highway speeds.

"Our tests show that neither makes enough of a difference to worry about," Consumer Reports wrote in its June issue. "Using air conditioning while driving at 65 mph reduced the Camry’s gas mileage by about 1 mpg. The effect of opening the windows at 65 mph was not even measurable."

The effect of turning off the air is probably more profound in stop-and-go traffic situations, but not much. "I would guess it could be a 5 percent mileage saving," Mazor said.

Buy additives, devices
Mazor, who has been with the auto club for 23 years, has been involved in tests of about 50 products that were supposed to boost mileage.

"There were additives for the fuel and the oil, magnetic devices that would wrap around the fuel line, things that would fit either in or on the air intake, devices that would add an electrostatic charge," he said. "We tried them all."

Consumer Reports also tried devices ranging from $50 to $250. The verdict was unanimous. The products didn’t work, or at least not to the degree that they were worth buying.

Of all the wacky ways people have tried to get better mileage, the strangest one Mazor had seen was a series of three small decals.

"They were to go onto the gas tank, and I think they were supposed to have holographic circuitry," he said. "The inventor claimed to have captured frequency energy from the fifth dimension that could double the miles per gallon."

Perhaps the inventor was inhaling too many gas fumes.

"He also made a sticker that was supposed to be placed within 2 inches of the human body to lose weight," Mazor said. "I put it in my wallet and carried it around for months. That didn’t work either."

 

Marketplace

November 16, 2010

Finance Manager 20 years’ management and sale experience, eight years’ finance experience. Consistent Presidents Club member with outstanding customer evaluations. Ability to manage sales associates and provide outstanding customer service. JeffPivaronas, 815-922-8223.

Controller/Office Manager Seeking position with customer-oriented, profit-motivated, employee-focused dealer. Will deliver exceptional managerial skills, unique expense reduction techniques, sound Human Resource judgment. Peter Schwarz, 708-388-8606.

Controller 30-time recipient of Ford-Lincoln-Mercury District Business Manager Award. A Pilot dealer for the FDCS system 6000, recently handled installation of FDCS system 7000. Manage staff of 12, expert in cost reduction. Donald Raimondi, 847-658-0879.

Comptroller 20+ years at Ford, GM, Import dealerships. Bank recon., financial statements, schedules, insurances, computer (ADP, UCS, R&R). Multi locations, multi franchises, many hats: P/R, A/P, L&T. Debra Svrlinga, 708-205-2025.