Kia hits aftersales service high

KIA Motors Australia (KMAu) has experienced a dramatic improvement to its customer and aftersales service satisfaction over the past two years, but the company’s chief operating officer Damien Meredith says there is still room to improve.

As reported by GoAuto this week, the South Korean car-maker’s placing in the annual JD Power Customer Service Index (CSI) study remained at fourth overall, following an eight-point improvement over last year, enough to keep it above the industry standard and just off the pace of Mazda, Toyota and Subaru.

Last year, Kia experienced a dramatic rise in its standing in the influential study, rising from ninth – below the industry standard – in 2014 to fourth place, even outpacing its Korean sister company Hyundai.

Speaking with journalists last week – before the JD Power Customer Service Index (CSI) results were released – Mr Meredith said other internal metrics for measuring customer service levels had revealed an improvement for the brand.

“Certainly all the other surveys we do internally and that KMC (Kia Motors Corporation) do for us are showing that we improved dramatically, we are continuing to improve our CSI,” he said.

“Certainly in the aftersales area we have put a lot of work into it. The other thing that helps us dramatically with customer satisfaction is the seven-year warranty. That gives our customers that certainty. That gives them a lot of comfort. We are working incredibly hard to ensure we keep that level.”

Despite being satisfied with the improvement to service levels, Mr Meredith acknowledged that Kia could be doing better when it comes to ongoing communication with its customers, after the purchase of a vehicle.

“The area that I think we need to improve on as an organisation, and the dealer network is certainly the contact through the journey, I think we need to improve in that area. The touch points. Once the customer has bought the car, I think we can improve dramatically with those touch points, keeping in contact with customers. We need to do that better, as does our dealer network.” When asked whether it was time for Kia to move into the online retail space, Mr Meredith said car-makers should be looking at future retail environments to determine the most effective method to sell cars.

“I think what all manufacturers have to do is look at the sales channel and what works and what doesn’t work. The dealer-manufacturer relationship hasn’t changed for over 100 years. It is a very old model and it is based on a lot of things. One thing manufacturers have to look at is the real estate cost of the dealer network in years to come,” he said.

“If you are in Sydney or Melbourne, the cost of actually owning a dealership and getting return on that investment is huge. We have to think very, very carefully with our dealer network what the next phase of that model is. Is it online? There is a lot of change.”

With Kia operating in a multi-franchise environment, Mr Meredith said there were challenges in determining the next step in automotive retail.

“Some manufacturers are moving into shopping centres. That seems to have some success. The most important thing I think is we have to get our dealer network onside about what we want to do collectively.

“We work in multi-franchise environment. It might be easy for us to say we want to go that way, but if you have six other franchises tacked on to that dealer who has got our brand, it’s a bit convoluted.”

Mr Meredith said regardless of what changes occur in the new-car retail space, he was focused on ensuring the dealer network makes money.

“I would like to see a more efficient use of space. The cost to the dealer network of investment is just huge. What that is, I am not quite sure,” he said.

“At the end of day, consumers will drive this as they will only pay what they think they will have to pay.

“What I do know is that not just our brand but every brand has to make more money out of the front of the business. They have to hold on to their margins in regards to new cars.”