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‘Not satisfied’ with customer satisfaction rating: VW

Lots to do: Volkswagen's MD says a shortfall in delership infrastructure is partly to blame for an ailing customer statisfaction record.

VW Australia MD says company sales grew too fast and infrastructure has not kept up

11 Apr 2014

VOLKSWAGEN Group Australia (VGA) managing director John White has admitted the company’s rapid sales growth over the past few years, unaccompanied by comparable growth in infrastructure across its dealer network, has had a big impact on its customer satisfaction rating.

Speaking with GoAuto at this week’s Melbourne-based launch of the new Golf R, Mr White said VGA had a long way to go addressing issues of customer satisfaction, notably in terms of service experience, declaring: “I am not satisfied with where we are.”“I think that there a couple of things that have affected the customer satisfaction,” he said.

“Number one was the recall situation, and we’re working our way out of that.

Those problems we had with those cars are going away.”

A possible fault with its DSG automatic transmission saw almost 26,000 vehicles recalled in June last year, affecting Polo, Golf, Golf Wagon, Golf Cabriolet, Jetta, Passat and Caddy models.

As of this week, Mr White said the company’s dealers had inspected and fixed 87 per cent of all affected vehicles.

The other main issue he identified was the dealer network struggling to keep up with the influx of new customers in recent years.

“From a network development perspective I think really part of the root cause we have had is our sales went up at a very high rate over the five years to last year and the infrastructure didn’t keep up,” he said.

“So then you’ve got infrastructure issues you've got to address one-by-one in terms of service capacity, (and) getting more bays and technicians.”

Mr White said these infrastructure issues, compounded by the rapid sales growth, were behind Volkswagen’s poor performance in the influential JD Power Customer Service Index (CSI) Study, which measures new-vehicle buyer satisfaction with the aftersales service process.

Last year, Volkswagen remained last on the table of 12 mainstream brands, with its CSI ranking down 14 points over 2012 to a new low of 743 (out of 1000) – 40 points below the industry average.

It also placed last in 2012 and second-last the year prior, having fallen from equal fifth (but still below the industry average) in the inaugural 2010 study. On the flipside, between 2009 and 2012, Volkswagen’s sales in Australia grew from 30,087 units to 54,835 units, with annual growth over each of those four years dipping no lower than 17.7 per cent.

Sales stabilised last year to 54,892, and are moderately up in 2014 thanks to strong Mk7 Golf numbers.

Mr White said the next step for VGA was to set up a customer satisfaction ‘committee’, and to address infrastructure issues within its dealer network, which in some cases experienced rapid sales growth without the requisite service centre growth to handle all the extra vehicles on the road.

“We’ve established with our dealers a customer satisfaction committee … and we’ve put in a person as a customer first manager who we recalled from China to to help us put a focus on that,” said Mr White.

“We have a strategy we’ve embarked on to get more exclusive dealers – not more dealers but more exclusive – and to have a satellite service strategy, and an off-site strategy.

“Those types of changes take time because they’re infrastructure changes that require investment.

“It’s not one silver bullet but there are a lot of things you need to do to improve.

“I fundamentally believe that the only way that we’re going to grow to the next level is to move up in terms of customer satisfaction, because from a loyalty perspective we’re fortunate because we still have high customer loyalty, but to retain them consistently over time you need to move up.”

Mr White said other strategies the company would implement among its network would include encouraging its dealers to setup satellite service centres in its catchment area.

“If you need another off-site service location we’ll support that,” he said, adding VGA would not tender franchises for new service-only centres from new partners, but rather would look to existing dealer members to expand their operations.

As GoAuto reported earlier this week, VGA plans to reduce its number of product offerings to make life easier for its dealers and less confusing for its customers. The Up, Eos and potentially the Scirocco are all on the chopping block in 2014.

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