Tuesday, September 15, 2009

Where Automakers Fall Down

My wife and I recently bought a used Land Rover LR3. We bought it from a gentleman who will buy a car at auction on your behalf for a minimal fee. They’re usually cars that have just come off a lease and still retain the remaining manufacturer’s warranty. All in all we probably saved about $7,000 versus what we would have paid if we had bought it from a dealer.

When we brought it in for a service recently, my wife inquired if she could have a loaner vehicle. The response was “No”. Why? Because we didn’t buy the vehicle from them.

Here’s exactly where auto manufacturers fall down.

Regardless of the where we bought our car, we still chose their brand. It’s still a luxury brand. One would think it would be a corporate mandate for someone driving a car that has $50K sticker price a loaner would be a minimal expense for enhancing our brand experience. I'm sure the brass at Land Rover will say, loaner vehicles are up to dealer discretion.

Jim Morton, the former Vice Chairman of Nissan once told me over lunch, “It’s pretty easy to sell the first car. The second, third or fourth is where we have a lot more trouble.”

I understand why. I’m by no means the first one to espouse this but at the end of the day, your opinion about your car and the car company begins the second you first show up in the service department.

A friend of mine used to work on the Audi business for their ad agency. The agency was in a situation where they had to defend the account. They had uncovered research that basically said that about 65% of first time Audi buyers wouldn’t buy another one. Why? Because of their service experience. I’ve owned about four Audis and can understand why. Maybe I’m a glutton for punishment but I’m in a different category of loyalty and that’s a topic for another post. If you go to Audi forums you can actually find banner ads from local mechanics that say, “Tired of your service experience at your dealership, come to us.”

Ummm, call me crazy this might suggest you have a problem on your hands. Oh and by the way, Audi fired the agency.

Dealer and manufacturer relationships have always been contentious but they are still inextricably linked. The manufacturer is of course required to provide competitive, attractive and reliable product but it becomes up to the dealer and specifically the service department to sustain the brand.

With this sentiment, in my mind, when my wife showed up to drop off her car, someone should have said, “Thanks for buying a Land Rover! We’re happy to serve you.” These days people have numerous ways to buy a car and I'm sure dealers will talk about their margins being squeezed but we're still a customer and punishing a customer because they didn't buy the car directly from you in my mind is just dumb.

I’ll tell you what Land Rover, you let us have a loaner and I’ll let you put your dealer license plate frames on to at least make people think we bought it from you.

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