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VEHICLE QUALITY IMPROVEMENTS REDUCE WARRANTY WORK

October 1, 2003
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WESTLAKE VILLAGE, CA—Quality improvements across the automotive industry are driving down the need for warranty repairs at new-vehicle dealerships and are transforming the nature of the dealer service business.

According to the J.D. Power and Associates 2003 Customer Service Index (CSI) Study, now in its 22nd year, the balance of work at dealerships is tilting more toward regularly scheduled maintenance as opposed to repairs. Routine maintenance business now makes up 57% of all work, an increase from 47% in 1999.

“Less warranty work means that automakers are taking cost out of their products through quality improvements,” says Joe Ivers, partner and executive director of quality/customer satisfaction at J.D. Power and Associates. “To re-place this declining revenue, dealers must now compete with other service providers, such as independent service facilities, for customer-paid service business, making them more accountable to their customers.”

The study notes that sales increases over recent years among certain franchises, particularly European brands, have resulted in bottlenecks at service bays. As growth in service capacity and accessibility has been outpaced by sales growth, some customers report frustration over getting their vehicles into the dealership in a reasonable and convenient time.

Infiniti ranks highest in the 2003 study with an index score of 900 out of a possible 1,000. Saturn, which led in 2002, follows Infiniti in the ranking, with an index of 896. Acura, Lexus and Lincoln tie for third position at 895.

Suzuki is the most improved brand in 2003, increasing 5% over 2002. Audi and Mercedes-Benz were each up 4%, while Ford and Mitsubishi each improved 3%.

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