Imports A/S Satisfaction, Rapidly declining

In the evaluation of consumers who had A/S service within past 1 year from automakers, Domestic cars had
higher evaluation than Imports. Imports was beaten by Domestic cars last year for the first time and in this
year the gap became even larger. That’s not because Domestic cars had performed well but because
Imports is getting worse and worse. While Japanese and Korean brands are having fierce competition in the
high ranking group, Honda took the 1st place among the entire brands. GM Korea became the 2nd place
winner among the entire brands with a slight gap but among the Domestic cars, it took the top for 2 straight
years.

A/S Satisfaction is an evaluation on A/S by the consumers (44,294 persons) who had A/S service from
Official or Authorized/Affiliated service stations of automakers within past 1 year among the respondents of
annual ‘Automobile Syndicated Research’ (2013 sample size; 101,701persons).

In the evaluation trend for past 5 years , Domestic cars (Total including Official·Authorized·Affiliated) had
reached 800 points in 2011 for the first time and then declined back to 790 points level [Figure 1]. Imports
turned into a serious declining trend since 2010 and beaten by Domestic cars last year. In this year, the gap
became even larger. Inferiority against Domestic is seen obviously. This change was caused by getting-
worse performance of Imports, not by improved A/S of Domestic cars.

A/S service of Domestic cars started to go ahead of Imports in earnest but there is sad reality in the deep
inside of it. A/S Satisfaction of Domestic cars had been widening the gap between Official service station
and Authorized·Affiliated service stations from 2009 with the poor performance of Official service station, and
in this year, the gap became 21 points [Figure 2].

The service of some Domestic makers’ official service stations is deteriorating rapidly, and Authorized/
Affiliated service stations are taking the role of compensation. Without the sacrifice of those, we cannot
think of such achievement of current time. Deterioration of Official service stations of Domestic makers is
far serious than the declining of Imports.

The factors that brought the differences between Domestic cars and Imports were compared for analysis.
Among the 27 items that comprise A/S Satisfaction, the score and gap of 5 items, in which Domestic cars
surpass Imports far ahead, are presented in [Table 1].

The items with the largest gap was ‘Maintenance/repair cost such as part price or labor cost were not
expensive than expected‘, for which 61% of Domestic cars said ‘yes’ but 36% of Imports said ‘yes’
displaying 25%p gap at the largest. 36% positive response rate of this item is the lowest among the entire
items, making us imagine how negative is the A/S cost of Import owners.

Following items in the evaluation for A/S of Domestic cars was ‘Able to check maintenance/repair process
and situation in real-time‘ with 15%p gap and ‘It didn't take long to get service after visiting service center’
with 11%p gap, etc. A/S of Domestic cars surpassed Imports far ahead in the aspects of cost, time and
procedure.

The ranking and score of 9 brands that have above the Industry average scores among 17 brands (over 60
cases) are presented in [Table 2]. Honda took the top with 821 points, followed by GM Korea (819 points)
and Toyota & Ssangyong (813 points each) in the high ranking group. Following after were Nissan (811
points) and Renault Samsung (810 points).

That has many differences with last year’s results, in which Japanese cars, Domestic cars and German
cars formed ranking groups in order (refer to: ‘A/S Satisfaction of Imports, Overwhelming victory of Japanese
cars’). Not like the case of last year, 3 Japanese mass-market brands and 3 minor Domestic brands are
dominating the high ranking group, while having fierce competition. It is noticeable that the Japanese
premium brands (Lexus, Infiniti) that took 1st and 2nd places last year, were pulled down to mid-to-high
ranking group.

The competition among 3 makers in 2012, GM Korea, Ssangyong and Renault Samsung, which was too
close to call with mere 3 points gap, end with the winning of GM Korea for 2 consecutive years by enlarging
the gap. Ssangyong’s 2nd place winner for 2 years in a row is also a noticeable achievement. Among
European brands, Mercedes-Benz only had above the average score, while most of the European brands
and major Domestic brands stayed below the average.

Although A/S service of Domestic cars surpassed Imports, there is a hidden story with which Domestic cars
cannot boast the success. For some Domestic makers, A/S service of Official service stations is getting
worse and worse, while the service gap generated from that is compensate by Authorized/Affiliated service
stations in inferior status. It’s like ‘A’ in superior status asks ‘B’ in inferior status do things right, while ‘A’ is
doing things briefly. Unless this kind of stream is reverted, the barely grasped superiority can disappear in a
brief moment.

Imports also have weaknesses. There is a large gap between the evaluation on Imports’ ‘Maintaining/
operating cost’ (refer to:’ Imports lead ahead with a large margin in Vehicle Product Satisfaction’) and the
evaluation on ‘A/S cost/time’. This gap is caused by having different respondents for those 2 areas in many
aspects. While ‘Maintaining/operating cost’ evaluation came out from the consumers who “purchased new
car recently”, ‘A/S cost/time‘ evaluation came out from all the people who recently had A/S service. In other
words, it’s because A/S evaluators include many out-of warranty customers, used-car buyers, accident
repairs, etc.

As the current situation, when the substantial number of Imports owners are initial Imports buyers and still
remain in warranty period, the relation between these people and Imports is like honeymoon. But honeymoon
doesn’t last long. A/S matter of Imports will increase exponentially in proportion with the number of vehicle,
not according to the number of sales. Unless thoroughly prepare now, it can develop into unbearable
problems in near future.