Project Report: After Sales service of Automobiles in India

PROJ
JECT REPO
ORT ON

ST
TUDY O SA
OF ATISFAACTIO LEV
ON VEL O
OF
CON
NSUMEERS T
TOWARRDS ‘A
AFTER
R-SALE
ES’
SER
RVICES OF A
S AUTOMMOBIL
LES

SU
UBMITTED BY
D

Mr. Ankit Tr
ripathi

Semester IV , Cours :PGDBM
se M

Ro No.: P1058
oll

Batch: 2010
B 0-12

MARKETIN
M NG

UNDER THE GUID
DANCE OF

PROF. JA
P AYSHREE WASNI
E IK

Syden
nham Inst
titute of M
Manageme Studie Resear And E
ent es, rch Entrepren
neurship
Educatio
on

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A Study of Satisfaction level of consumers
Towards ‘after-sales’ services of Automobiles

This project report in the Area of Marketing Specialization based on the in-depth
study of the project theme is submitted in March,2012 to the Sydenham Institute of
Management Studies and Research and Entrepreneurship Education, B – Road,
Churchgate, Mumbai – 400 020, in partial fulfillment of the requirements for the award of
the diploma of Post Graduate Diploma in Business Management ( PGDBM ),
recognized by Government of Maharashtra.

Submitted By

NAME: Ankit Tripathi ROLL NO. : P1058

Batch: 2010-2012

Through

Name of the Guide :- Prof. Jayshree Wasnik

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CERTIFICATE

This is to certify that the project report entitled “A Study of Satisfaction level of
consumers towards ‘after-sales’ services of Automobiles” is submitted in March,2012
to the Sydenham Institute of Management Studies and Research and
Entrepreneurship Education, B – Road, Churchgate, Mumbai – 400 020,by Mr. Ankit
Tripathi bearing Roll No. P1058 (2010 – 2012) in partial fulfillment of the requirements
for the award of the diploma of Post Graduate Diploma in Business Management (
PGDBM ), recognized by Government of Maharashtra.

This is a record of his own work carried out under my guidance. He has discussed
with me adequately before compiling the above work and I am satisfied with the quality,
originality and depth of the work for the above qualification.

PLACE: MUMBAI.

DATE: Prof. Jayshree Wasnik

SIMSREE, 3rd Floor,

B-Road ,Churchgate, Mumbai-
40020.

Telephone No.: 022 –
61510721

E-mail -
jayshree.wasnik@simsree.net

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TABLE OF CONTENTS
1. Auto Industry in India ....................................................................................................1

1.1 Introduction..............................................................................................................1

1.2 Evolution..................................................................................................................1

1.3 Current Market Scenario..........................................................................................3

1.4 Classification of Market Segments ..........................................................................6

2. After Sales Service .....................................................................................................10

2.1 Definition ..............................................................................................................10

2.2 Importance of After Sales Service .......................................................................10

2.3 After Sales Service as Key to Customer Retention .............................................12

3. After Sales Service in Automobile Sector .................................................................15

3.1 Introduction ..........................................................................................................14

3.2 Nielsen Survey Result...........................................................................................14

3.3 Opportunity to Build or Break Loyalty ................................................................15

3.4 Some Initiatives by Car Manufacturers in India ...................................................16

4. Research Plan and Methodology .................................................................................18

4.1 Need for Study ......................................................................................................18

4.2 Objective of the project ........................................................................................18

4.3 Variables under Study...........................................................................................18

4.4 Data Collection .....................................................................................................19

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5. Research Findings and Analysis ..................................................................................20

5.1. Findings.................................................................................................................20

5.2. Analysis using SPSS .............................................................................................32

6. Observations ................................................................................................................35

7. Conclusion ...................................................................................................................37

8. Recommendations........................................................................................................38

9. Bibliography and References .......................................................................................39

10. Annexure....................................................................................................................40

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LIST OF TABLES
Table 1 Distribution of domestic market share in Auto Industry........................................................... 3

Table 2 Market share in Passenger Car Industry in 2010 – 2011 ........................................................... 5

Table 3 What is your vehicle type? ....................................................................................................... 20

Table 4 Car Brand ................................................................................................................................. 21

Table 5 Regular Service Intimations ..................................................................................................... 21

Table 6 Ease of contacting service department ..................................................................................... 22

Table 7 Service Advisor's expertise ...................................................... Error! Bookmark not defined.

Table 8 Appointment Availability ........................................................................................................ 23

Table 9 Ease of Checking in the vehicle ............................................................................................... 24
Table 10 Communication during WIP .................................................................................................. 25

Table 11 Availability of Spares ............................................................................................................ 25

Table 12 Punctual Delivery .................................................................................................................. 26

Table 13 Extra Work Communication .................................................................................................. 27

Table 14 Cross selling activities ........................................................................................................... 28

Table 15 Consumer Forum Awareness ................................................................................................. 28

Table 16 Unpleasant experience in service station ............................................................................... 29

Table 17 Resolution by service manager .............................................................................................. 30

Table 18 Escalations to Forums ............................................................................................................ 30

Table 19 Better Service over marginally better product ....................... Error! Bookmark not defined.

Table 20 Better Service to higher variants- .......................................................................................... 31

Table 21 Chi-Square test (Service Intimations and Desired appointment time) ................................... 32

Table 22 Correlation (Unpleasant Experience and its Resolution by Manager) ................................... 33

Table 23 Correlation (Unpleasant Experience and Approached Forum) .............................................. 33

Table 24 Correlation (Timely Delivery and Providing better service to higher variants) .................... 34

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Table 25 Correlation (Cross Selling and Unpleasant experience) ........................................................ 34

LIST OF CHARTS
Chart 1 Pie chart showing distribution of domestic market share in Auto Industry .............................. 4

Chart 2 Market share in Passenger Car Industry in 2010 – 2011............................................................ 5

Chart 3 Box diagrams of a sedan (top), station wagon (middle) and hatchback (bottom) .................... 20

Chart 4 What is your vehicle type? ....................................................................................................... 20

Chart 5 Car Brand ................................................................................................................................. 21

Chart 6 Regular Service Intimations ..................................................................................................... 21

Chart 7 Ease of contacting service department ..................................................................................... 22

Chart 8 Service Advisor's expertise ...................................................... Error! Bookmark not defined.

Chart 9 Appointment Availability......................................................................................................... 23

Chart 10 Ease of Checking in the vehicle ............................................................................................. 24
Chart 11 Communication during WIP .................................................................................................. 25

Chart 12 Availability of Spares ............................................................................................................. 25

Chart 13 Punctual Delivery ................................................................................................................... 26

Chart 14 Extra Work Communication .................................................................................................. 27

Chart 15 Cross selling activities............................................................................................................ 28

Chart 16 Consumer Forum Awareness ................................................................................................. 28

Chart 17 Unpleasant experience in service station ............................................................................... 29

Chart 18 Resolution by service manager .............................................................................................. 30

Chart 19 Escalations to Forums ............................................................................................................ 30

Chart 20 Better Service over marginally better product ....................... Error! Bookmark not defined.

Chart 21 Better Service to higher variants- ........................................................................................... 31

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ACKNOWLEDGEMENTS

I wish to express my gratitude to my project guide “Ms. Jayshree Wasnik” for her valuable

suggestions. Because of her guidance and help, I am able to complete this project report on “A

Study of Satisfaction level of consumers towards ‘after-sales’ services of Automobiles”

I would also like to thank the respondents of the survey for taking out valuable time to fill the

survey.

Ankit Tripathi

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EXECUTIVE SUMMARY

With the ever burgeoning middle class in India and rising incomes, the demand for automobiles
in the country is on the rise. With almost all major players vying for the pie in the market, it is
becoming a buyer’s market

Companies have worked over-time to ensure that their product is best in the category and have
concentrated heavily on the product. One aspect that has been ignored here is that when the sale
is made, it is not just the product. They also sell service.

With ever increasing competition and limited innovations on the product end, companies are now
forced to consider the service aspect of their offering and focus more on adding value to the
customer by providing superior service.

The type of service could be pre or post sales. Pre sales service consists of Car Demo, Test
Drive, Loan disbursement scheme etc. The Post or more popularly know as “After-Sales” service
consists of regular maintainence and check-ups for the vehicle. Companies generally provide
warranty support which is either limited by duration or the mileage

The project aims to find out the satisfaction levels of consumers towards the service that is being
offered to them in post-sales category. The study does not aim to compare services of different
companies thereby declaring a winner, but it tries to bring out the common factors which
companies lack in and need to improve upon in order to provide better customer service thereby
leading to better customer retention and finally higher revenues

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opy

1. AUT INDU
TO USTRY IN INDIA
N

1.1. INT
TRODUCT
TION

Circa 1
1895, the f
first modern automobile rolled o
n onto the st
treets of M
Mumbai (th
hen
Bombay It was o of the i
y). one initial mode of horsel
el less carriages, much p
prior to Hen
nry
Ford’s e
experiment of the icon Ford M
nic Model – T. T Indian automobile industry h
The e has
come a long way since then. Today, it is one of th fastest g
he growing ind
dustries in t
the
world. T automo
The obile industr is one of the major employmen and reven generato
ry f nt nue ors
for the c
country. Alm all maj auto com
most jor mpanies of t world ar vying for a space in t
the re the
Indian m
market. The market is segmented on several basis viz. size of the car, heritag
e d l ge,
model t
type, usage and perfo
e distribution, etc. each enjoying a healthy a
ormance, d and
increasingly stiffer competitio day by day. From the point o view of this resear
r on of f rch
project, it is there
efore vital t first stud the Indi automobile market in order to
to dy ian t,
understa its evolu
and ution, the im
mportant events, and th current m
he market scenar In conte
rio. ext
of the pr
roject we sh be limit
hall ting our disc
cussion to th passenger car industr only.
he ry

1.2. EV
VOLUTION
N

Fig1.1 Maruti 80 – Dawn o a new er
00 of ra

The pas
ssenger car i
industry in I
India can be practically divided int two eras: the Pre –
e y to
Maruti e and the P – Maru era. At th time of in
era Post uti he ndependenc India virt
ce, tually had n
no
home gr
rown compa manufacturing auto
any However, ma British a American
omobiles. H any and
compan had esta
nies ablished thei subsidiari in India for assembl purposes. At this tim
ir ies ly . me,
the new governm of India adopted th License R as way fo
wly ment a he Raj forward for t economy
the y.
This led to consolid
d dation of the economy i the hands of the existing compan
e in s nies, namely
y

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 Hindustan Motors,
 Premier Automobiles and
 Standard Motors.

The industry didn’t see any other major competitor for almost three decades since then.
As a combined effect of the License Raj, low demand for automobiles and lack of
indigenous R & D, the Indian auto market hardly registered any progress till 1980. It was
in early 1980’s that Maruti 800 project was initially launched. Its launch marked a
beginning of a major revolution in the industry. The original car was intended to be a
indigenously designed, economy car for the masses. However, this plan was soon
dropped as political interference and engineering complications delayed the project. Very
soon, company was suffering from bankruptcy. As a result, its assets were nationalized
and the State owned Maruti Udyog came into being. This time around, the plan for
indigenous development was abandoned and the company adopted the Joint Venture
approach. Many leading foreign automobile companies were considered, and the Suzuki
Motor Co. from Japan was finalized. It was chosen mainly because of its expertise in the
small car industry, the range of available cars in its stable (which could be considered for
future launch), and also because of attractive terms and conditions. Thus Suzuki came to
own 26 percent in the JV, with permission to increase to 50 percent in the future.

Thus the Maruti 800 was launched (loosely engineered on the Suzuki Alto platform), and
it quickly captured the market. It further led to the launch of Maruti Omni van and Maruti
1000 models, which further enhanced Maruti’s share in the Indian market. The Maruti
models were periodically upgraded, keeping in sync with international changes. In the
first half of the 1990s, Maruti enjoyed around 60 percent of the market share in passenger
cars. The launch of Maruti led to shake up among the competitors as well. Premier
automobiles acquired rights from Fiat to manufacture Fiat 124 and Hindustan motors did
the same with Vauxhall Motors for the Contessa. Many other small time automakers too
acquired rights for several foreign cars. Premium automobiles in particular formed a
number or JV with European companies to establish themselves in the upper segments.

Ankit Tripathi P1058

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With the liberalization of the economy came a demand from new companies, both local
and international, to enter the Indian market. Tata Motors launched their first passenger
car viz. Tata Estate. Hindustan Motors began manufacturing Opel Astra, a brand owned
by General Motors. This marked a beginning of a flurry of cars emerging on the scene.
By the turn of the century, many international companies had emerged on the Indian
scene. Prominent amongst them were Hyundai, Toyota, Honda, Ford, Fiat, etc. Even
luxury marquees like Mercedes – Benz and gained substantial visibility. Home grown
companies such as Tata Motors and Mahindra and Mahindra too contested for a share in
various segments. The later years saw another wave of foreign companies opening up
factories, this time led by General Motors, Skoda, Nissan, Volkswagen, BMW, Audi, etc.
The auto industry in India now is at par with international standards, with companies
increasingly looking towards it as the future growth engine.

1.3. CURRENT MARKET SCENARIO

The passenger car industry in India constitutes around 16 percent share of the Indian
automotive market, and is a rapidly growing one, with a growth rate of 10 percent in the
last year.

Domestic Market Share in 2010 – 2011
Type of Vehicles Percent Share Domestic Sales
Passenger 15.86 19,49,776
Vehicles
Commercial 4.32 531,395
Vehicles
Three Wheelers 3.58 440,368
Two Wheelers 76.23 93,71,231
Total 100 12,290,770

Table 1: Distribution of domestic market share in Auto Industry


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Commercial Three
Vehicles, 4% Wheelers, 4%

Passenger
Vehicles, 16%

Two Wheelers,
76%

Graph 1.1.: Pie chart showing distribution of domestic market share in Auto Industry

The passenger car segment has witnessed more than 30 launches in the past years as new
brands and companies enter the scene. Also, the segment focus has shifted from being an
internationally laggard one, to one being at par with it. Many companies such as Toyota,
General Motors now launch their international car versions or upgrades in India rather
than other markets.

The passenger car segment is still dominated by Maruti Suzuki, which has a share of
47.68 percent in 2009 - 2010, though it represents a decline to that of previous year. It is
followed by Hyundai Motors with a share of 18.89 percent, Tata Motors with 14.72
percent, etc. The next in line are Ford, General Motors, Honda, Toyota, etc.


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Market Share in Passenger Car Industry in 2009 – 2010 (by sales
numbers)
Company Percent share
Maruti Suzuki India 47.68
Hyundai India 18.89
Tata Motors 14.72
Ford Motors India 5.31
General Motors India 4.87
Honda Siel 3.20
Mahindra & Mahindra 2.12
Others 3.21
Total 100

Table 1.2.: Market share in Passenger Car Industry in 2010 – 2011

Honda Mahindra &
General Others , 3.21
Siel , Mahindra ,
Motors India 3.2 2.12
, 4.87
Ford Motors
India , 5.31

Maruti Suzuki
Tata Motors , India , 47.68
14.72

Hyundai India
, 18.89

Figure 1.2.: Market share in Passenger Car Industry in 2010 – 2011


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1.4. CLASSIFICATION OF MARKET SEGMENTS

A market segment consists of a group of customers who share similar sets of wants and
demands. The marketer’s task is to identify such segments within the industry so as to
decide which one to target. Segment marketing offers several benefits over mass
marketing:
 The company can create a more fine-tuned product or service offering and price it
appropriately for the target segment
 The company can more easily select the best distribution and communication
channels
 The company has a clearer picture of its competitors in the same segment

In the context of the automobile industry, classifying market segments would be done on
the following basis:
1. Based on the price of the car

2. Based on the length of the car

3. Based on the shape of the car

1.4.1. Based on the price of the car
A – segment
It is the entry level segment and it ranges upto Rs. 3 lakhs. Several cars in this segment
are Maruti 800, Maruti Alto, Tata Nano, Hyundai Santro, GM Spark, etc.

B – segment
It ranges from Rs. 3 lakhs to Rs. 6 lakhs. Cars in this segment include Maruti Swift,
Maruti Estillo, Hyundai Santro Xing, Tata Indica, GM Beat, Ford Figo, etc. There has
been a rise in number of people who belong to the affluent middle class and wish to
graduate to these cars which provide the extra glitz and glamour than an entry level car.
These cars come with fancy things like power steering, power windows, pepped up
engine and conform to the latest emission norms. The cars in the A and B segment are
typically hatchbacks.


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C – segment
At this stage of lifestyle, cars cease to become a mode of transport and are representative
of social status and repertoire. Thus people go for cars which are bigger in size, have a
reputed brand image, and are more costly. Cars in segment are Honda City, Tata Indigo,
VW Vento, Ford Ikon, Chevrolet Optra, etc. This segment ranges from Rs. 6 lakhs to Rs.
12 lakhs.

D – segment
The cars in this segment are a statement of luxury and come with a heavy price tag. Cars
are usually customized and have a host of accessories fitted into it. This segment ranges
from Rs. 12 lakhs and above. Recently, this segment has began to blossom in India, with
many luxury marquees like Mercedes, BMW, Audi, Volvo, Skoda, etc coming on road.

1.4.2. Based on the length of the car.
A segment – Cars that are less than 3.5 metres long

B segment – Cars between 3.5 to 4 metres long

C segment – Cars between 4 to 4.5 metres long

D segment – Cars that are more than 4.5 metres long.


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opy 8

1.4.3. B
Based on the shape of t car.
e the

Figure 1.2.: Box d
diagrams o a sedan (
of (top), statio wagon (
on (middle) an hatchba
nd ack
m)
(bottom

back :Hatch
Hatchb hback is a ca which has two sections. One is t engine section and t
ar s the the
other is shared pas
ssenger and cargo secti
ion. These a usually five door c
are cars where t
the
rearmos section (i.e. cargo area) is acces
st ssible via a top-hinged liftgate wit a facility to
th
fold dow rear seat and enable flexibility within the shared pass
wn ts y senger and c
cargo volum
me.
Sedan/ S
Saloon/ Not
tchback

Sedan o Saloon is a three-box car with th segmen namely A B & C. T
or x hree nts A, These three a
are
the engi passeng and carg compartm
ine, ger go ments respec
ctively. The cargo comp
partment is
called as the boot a is the ba differen between a sedan and a hatchbac
and asic nce d ck


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Coupe :A coupe is usually manufactured on an existing sedan platform, but has a sporty
look to it. Detailed definitions vary from manufacturer to manufacturer. Coupes designed
these days are usually 2 – seater cars, thus distinguishing between them and a sedan
Convertible

Convertible is a car where the roof can retract or fold away that converts it from an
enclosed car to an open air car. Mostly the high-end premium and expensive cars have
such facility.

Minivan / MUV : They are cars designed on a 1 – box or 2 – box approach, with
maximum interior space being the topmost criteria.

Station Wagon : A station wagon is a variant of sedan / saloon with an extended roof
that covers the shared passenger and cargo compartment. The station wagon has a bigger
cargo area, which is accessible via a 5th door i.e. a liftgate or tailgate.

Sports Utility Vehicle / Offroader: They are similar to a station wagon but are built on
light truck chassis. They generally have a 4 – wheel drive, making them suitable for both
on – or off – road capability


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2. AFTER SALES SERVICE
2.1 DEFINITION

After Sales service can be defined as the Periodic or as-required maintenance or repair of
equipment by its manufacturer or supplier, during and after a warranty period.

It Refers to all measures of marketing, which are taken from manufacturers and retailers
in order for a successful business transaction or sale to customers for their own products
and binding them to their own services. Aftersales encourages repeat and additional
purchases, increasing customer satisfaction and ensures long-term customer loyalty.
Aftersales often achieves a higher margin than new business, and is a sustainable ways to
increase customer value and profitability.

The needs and demands of the customers must be fulfilled for them to spread a positive
word of mouth. In the current scenario, positive word of mouth plays an important role in
promoting brands and products. After sales service makes sure products and services
meet or surpass the expectations of the customers.

After sales service includes various activities to find out whether the customer is happy
with the products or not. After sales service is a crucial aspect of sales management and
must not be ignored.

2.2 IMPORTANCE OF AFTER SALES SERVICE

After sales service should be an integral part of any companies’ sales strategy. A good
After Sales service can with its excellence help you gain market share, reduce after-sales
related overheads on products and services sold and most important of all key to
customer retention. Most customers will not make a repeat purchase or continue with a
company’s services in case of a bad experience.

Many companies underestimate the potential After Sales has for giving you a competitive
advantage. Customers expect a high-quality customer service, especially as they focus on


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getting good value for their money and are willing to spend more with those that deliver
the best.

According to American Express Customer Service Barometer “buying decisions of 89 per
cent of consumers are influenced by convenience and 90 per cent of them attach
importance to value-for-money propositions, almost 90% of consumers make their
purchases based on the quality of after sales customer service.”

The process of managing products after they have been sold has many names, such as
After Sales, Reverse Logistics, Returns/Service Management, After Sales Service, and
Customer Care.

Some Facts About After Sales Service:

1. 6% of all items sold are returned (Returns Logistics, 2009).
2. 68% of returns have no technical fault (Accenture report, 2007).
3. The average loss related to a return is E19 (Newgistics, 2007)
4. Processing returns costs four times as much as processing the original order
5. An average of one consumer phone call is made per return

Today many companies operate in complex value networks, but they lack the end-to-end
control and visibility to effectively manage the discrete activities that make up the
process, and they do not know how well these activities are being performed.

A number of solutions are now available for the after sales process using Cloud
processes. Service providers using this technology are able to provide effective
management of their after sales business process network with the help of automated
procedures. Other benefits are continuous visibility of entire operation in real time and
quick access to all important data pertaining to after sales management. The cloud
process confers entire control in your hands and improves efficiency while saving cost,
with les human involvement for administration purposes as the processes are streamlined.


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The cloud process facilitates better planning of assets and displays excellent forecasting
capabilities with efficient inventory management and finance management roles. The
process is easily accessible through mobile and web interfaces which is a great advantage
to the mobile customer.

In today’s highly competitive world the cloud process has the power to make your after
sales process a huge success. With its flexible qualities and intelligent features it enables
company better detailing and increased customer retention

2.3 AFTER SALES SERVICE AS KEY TO CUSTOMER RETENTION

Good after-sales service is the key to customer retention, with 77 per cent of Indian
consumers asserting that they will not make a repeat purchase or continue with a
company's services in case of a bad experience, says an American Express report.

In order to attain new customers and retain the older ones, good customer service cannot
be ignored as a majority (82 per cent) of Indian consumers value it the most while
making a purchase.

Customers want and expect high-quality service, especially as they focus on getting good
value for their money in a difficult economic environment, and are willing to spend more
with those that deliver excellent service -- suggesting substantial growth opportunities for
businesses that get customer service right.

As per the findings of the American Express Customer Service Barometer, 76 per cent of
Indian consumers are ready to shell out 11 per cent more for excellent customer service.
In fact, 67 per cent of consumers have paid more for a product or a service of a company
with a good history of customer service.

Moreover, 86 per cent of the consumers are ready to give a second chance to companies
with a good track record even after a poor experience.

While the buying decisions of 89 per cent of Indian consumers are influenced by
convenience and 90 per cent of them attach importance to value-for-money propositions,


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the majority of consumers (90 per cent) make their purchases based on the quality of
customer service.

The American Express Customer Service Barometer is a survey conducted in India and
eleven other countries exploring attitudes and preferences toward customer service.

Approximately 65 per cent of Indian consumers share the belief that companies have
increased their focus on providing good customer service, compared to 49 per cent in
Japan, 47 per cent in Mexico and 37 per cent in America, which seems to reflect the
corporate mindset to retain customers as well.

If the company is successful in satisfying its customers in terms of service, it gets the
benefit of word-of-mouth publicity. About 95 per cent of consumers give positive
reviews about companies in case of good service in contrast to 77 per cent who speak
negatively after a poor experience.


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3. AFTER SALES SERVICE IN AUTOMOBILE SECTOR
3.1 INTRODUCTION

Cars happen to be an expensive object and for most it holds aspirational value. Having
a car in household is a sign of good times. Naturally, one takes extra care to make sure
that the product being delivered is upto the expectation of the customer.

After Sales service in cars include the warranty on the car overall exlcuding some
wearable items like tyres, body bumpers and internal accessories. Periodic servicing is
offered by most car manufacturers for a limited time period/upper limit on mileage.

In light of recent rush by automotive giants from across the globe, differentiation
holds the key and After Sales service is one important aspect after the product itself by
means of which the manufacturer can stand out and get noticed and thereby result in
increased sales

3.2 NIELSEN SURVEY RESULTS

A recent survey by Nielsen suggests that automakers have opportunities to improve their
business performance in the short term by focusing more on the customers they already
have. Especially in these tough times for the industry, one of the most powerful
techniques for converting buyers into die-hard fans is providing exceptional after-sales
service.

Nielsen surveyed more than 1,800 customers who had purchased all the automotive
brands sold in the India., to better understand their ownership and sales experience and to
assess their brand loyalty. They asked owners to rate, on a scale of zero to 10, how likely
they were to recommend their vehicle to a friend or colleague. By subtracting the
percentage of "detractors" who gave scores between zero and 6, from the percentage of
"promoters" who gave a score of 9 or 10, they calculated a "Net Promoter Score" (NPS).
NPS is already used in dozens of industries to determine how deep loyalty to a particular
company runs among its customers, and how it stacks up against its competitors when it
comes to customer loyalty.


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The NPS survey for automakers revealed two important findings. First, promoters are
nearly 10 times more likely than detractors to repurchase or lease a vehicle of the same
make or brand as their current one. Second, promoters are far more likely to recommend
their vehicle brand to a friend. Each promoter provides nearly five purchase referrals,
while each detractor dissuades two prospective buyers. Indeed, high NPS correlated with
healthy new-car sales growth; name plates with lagging scores had flat or declining unit
sales.

3.3 OPPORTUNITY TO BUILD OR BREAK LOYALTY

High among the factors that create promoters—and help sustain their loyalty—is a strong
after-sales service experience. The reason is simple: Dealer service is the key point of
contact with customers at the critical time when most people are weighing their next
vehicle purchase. Owners' brand enthusiasm tends to erode as the vehicle ages and the
warranty expires. But it is precisely at this point—about four years after the initial sale—
that the leaders capitalize on their loyalty advantage by using maintenance visits as
opportunities to reinforce their ties with promoters and win over detractors.

Excellent service not only reinforces relationships with customers who already feel loyal
to a brand. It can also defuse ill will that causes disaffected customers to bad-mouth the
brand. Indeed, the brand leaders excel especially at turning unplanned repair visits—those
critical moments of truth on which a customer relationship can hinge—into opportunities
to strengthen customer bonds. While most carmakers aim to ensure that the service
experience does as little harm as possible, the leaders set out to surprise customers with
ease and convenience when they expect it least and value it most.

The power of nurturing promoters shows up dramatically in data showing how severe the
damage can be when a repair experience doesn't go well. Overall, the NPS of loyalty
leaders whose vehicles have not needed a repair is a stellar 85. It falls off to a respectable
77 when the vehicle needs a mechanic's attention. But among loyalty laggards, an
unscheduled stop in the shop resulted in scores plummeting 29 points to a dismal 19.


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Owners of those vehicles are angry, and they are going to tell their friends and colleagues
about it.

Ultimately, the biggest influence on customer loyalty and affinity for the nameplate is the
quality of the vehicle itself. But a bad after-sales experience can erode it just as quickly.
In the economy they face today, automakers need to rethink how they win and retain
every customer they have.

3.4 SOME INITIATIVES BY CAR MANUFACTURERS IN INDIA

Car manufacturers are increasingly focusing on expansive after-sales service facilities to
hook customers

The country’s largest car manufacturer, Maruti Suzuki India (MSIL), has initiated its
largest service network expansion drive this financial year since its inception. In the
course of the year, it intends to add 200 outlets to cater to demand across sectors.

MSIL has 2,855 service centres across 1,363 cities. The number is set to cross the 3,000-
mark by the end of 2010-11. The company also has customers in 2,900 talukas and 70 per
cent of these have been covered under their rule of a service station every 25 km. As of
date, the average distance to the closest MSIL service station in the remaining areas is 35
km.

Hyundai Motor India (HMIL) has firmed up plans to open 130 additional facilities to
service customers in 2011. This would increase the number of service points for Hyundai
cars to 757.

Toyota, set to foray into the intensely competitive small car segment with the Liva in
April next year, is working on doubling its sales and service centres by the end of this
year. TKM had 97 sales and service centres last year, which would increase to 150 by the
end of this year. Of this, 135 centres would have workshops for maintenance activities.
Among others, Toyota has developed a new dealership management system, which would
enable the company to maintain a database for all its customers across the country.


Guide Copy 17

General Motors India, aiming to treble sales in India by 2014 on the back of the six new
models it has slated for launch, starting December 2012, is expanding the number of
service facilities by 50 per cent to 300 by March 2013. GM is already offering three-year
free maintenance for its small cars, the Chevrolet Beat, Spark and Aveo UVA, a first in
the industry.

Tata motors are expanding our after-sales network in tier-II and tier-III cities on the
back of increasing demand. It has 800 service points for passenger vehicles across 500
cities and towns.


Guide Copy 18

4. RESEARCH PLAN AND METHODOLOGY

4.1 NEED FOR STUDY

In light of intense competition for customers in India, it is imperative for car
manufacturers to hold that extra edge over their rivals. It has been observed that after
sales service even though an integral part for a car manufacturer to establish their
dominance in Indian markets is often ignored. The study is not comparative where we
rate one manufacturer vis-à-vis another but to understand the general level of service that
a customer expects and what is being delivered to him

4.2 THE OBJECTIVE OF THIS PROJECT

 To find the current satisafaction level of consumers towards Automobiles
 To find the awareness level of people towards after-sales services
 To find the percentage of people who are well versed with the concept of
consumer courts for arbitration issues
 To understand if factors like warranty and after-sales service have bearing on
customer choice for a product
 To find if there is any relationship between price of a product and the level of
after-sales service offered

4.3 VARIABLES UNDER STUDY

The study will try to understand and gauge the different parameters to judge the
likes/dislikes of car owners. The various parameters under consideration are

 Regularity of updates
 Ease of contacting service department
 Service advisors functional knowledge


Guide Copy 19

 Availability of desired time-slot
 Ease of checking in the vehicle
 Communication during repairs/maintainence
 Spare part availability
 Delivery promise punctuality
 Reasons for delaying service
 Cross-sell attempts
 Consumer Forum Awareness

For this purpose, research methodology is implemented. This is implemented as
described below:

4.4 DATA COLLECTION

Primary Data: Structured Questionnaire
Secondary Data: Online Database, Journals, Surveys
Sample Unit: Respondents owning cars across subarban Mumbai.
Sample Technique: Random sampling
Sample Area: Mumbai
Sample Size: 200
Statistical Tool: SPSS


Guide Copy 20

5. RESEARCH FINDINGS AND ANALYSIS
The following are the results of the questions asked to the respondents in the
questionnaire (attached in the annexure section). The respondents were asked a range
of questions in three distinct categories

 Beginning from their vehicle type and Brand of the vehicle to understand the
class of the respondent
 Next, they were quizzed on various aspects concerning their overall
experience with the service delivery of their car manufacturer
 Finally, they were asked questions which judged if they were aware of
consumer forums for welfare of consumers and if at all they felt the need to
approach such forums

5.1 FINDINGS

1. What is your vehicle type?

Vehicle Type Count
Hatchback 102
Sedan 83
MUV 5
SUV 16

Vehicle Type
SUV, 16
MUV, 5

Hatchback

Hatchback, Sedan
102 MUV
Sedan, 83
SUV


Guide Copy 21

2. Which brand of car you own?

Brand Count
Chevrolet 18
Fiat 5
Honda 25
Hyundai 35
Mahindra 14
Maruti 51
Nissan 5
Skoda 8
Renault 5
Tata Motors 18
Toyota 10
Volkswagen 12

Brand
Volkswagen, 12 Chevrolet, 18
Toyota, 10 Chevrolet
Fiat, 5
Fiat
Tata Motors, 18
Honda
Renault, 5
Honda, 25 Hyundai
Skoda, 8
Mahindra
Nissan, 5 Hyundai, 35
Maruti
Maruti, 51 Nissan
Skoda

Mahindra, 14 Renault

3. Do you receive regular intimations through calls/sms for "service due" for your
vehicle?

Regular
Count
Intimations
Yes 116
No 90


Guide Copy 22

Regular Intimations

No, 90 Yes

Yes, 116 No

4. How is the ease of contacting the service department to make an appointment?

Appointment
Count
Ease
Excellent 21
Good 125
Average 50
Poor 10

Appointment Ease
Poor, 10 Excellent, 21

Excellent
Average, 50 Good
Average
Good, 125 Poor


Guide Copy 23

5. The service advisor's understanding of the work required when you booked the
appointment?

Knowledge
Count
level
Excellent 23
Good 34
Average 135
Poor 14

Knowledge level

Excellent
Good, 34 Good
Average
Average, 135
Poor

6. The availability of an appointment to suit you.

Appointment
Count
Suitability
Excellent 13
Good 124
Average 61
Poor 8


Guide Copy 24

Appointment Suitability

Excellent
Average, 61 Good
Average
Good, 124
Poor

7. The ease of checking in at service reception on the day you brought your
motorhome in for service/repair

Check in ease Count
Excellent 26
Good 133
Average 38
Poor 9

Check in ease
Poor, 9

Excellent
, 26
Excellent
Average, 38
Good
Average
Good, 133 Poor


Guide Copy 25

8. Communication during service/repairs to keep you updated on progress

Communication
Count
during WIP
Excellent 17
Good 76
Average 93
Poor 20

Communication during WIP
Excellent, 17

Poor,
20
Excellent
Good
Good, 76 Average
Average, 93
Poor

9. Availability of Spares

Availability of
Count
Spares
Excellent 67
Good 56
Average 73
Poor 10


Guide Copy 26

Availability of Spares
Poor, 10

Excellent
Excellent, 67 Good
Average, 73
Average
Poor

Good, 56

10. Was your vehicle ready for collection at the agreed time?

Punctual Delivery Count
Yes 148
No 58

Punctual Delivery

No, 58
Yes
No
Yes, 148


Guide Copy 27

11. If you were advised that further work was required at a later date were you were
fully informed of the reasons why and either booked in for that work or advised that
you would be contacted when the necessary parts arrived in stock?

Extra Work
Count
communication
Yes 123
No 83

Extra Work communication

No, 83
Yes
No
Yes, 123

12. Do the customer service executives try to cross-sell other car accessories?

Cross Sell Count
Yes 128
No 78


Guide Copy 28

Cross Sell

No, 78
Yes
No
Yes, 128

13. Are you aware of consumer forums by Ministry of Consumer Affairs?

Forum
Count
Awareness
Yes 116
No 90

Forum Awareness

No, 90 Yes

Yes, 116 No

14. Have you ever had an unpleasant experience at the service center ?


Guide Copy 29

Unpleasant
Count
Experience
Yes 53
No 153

Unpleasant Experience

Yes, 53

Yes
No

No, 153

15. If yes, was it resolved by service center Manager?

Resolution Count
Yes 37
No 42
NA 127


Guide Copy 30

Resolution

Yes, 37

Yes
No
No, 42
NA, 127 NA

16. In case of escalations, have you approached these forums?

Escalation to
Count
forums
Yes 14
No 77
NA 115

Escalation to forums
Yes, 14

Yes

No, 77 No
NA, 115
NA


Guide Copy 31

17. If given a choice, would you go for a product offering better service even though
you might want a different product?

Better Service
score over
Count
marginally
better product
Yes 125
No 81

Better Service over marginally better
product

No, 81 Yes

Yes, 125 No

18. Do you believe that better service is provided by your car manufacturer for
expensive variants?

Better Service
to higher Count
variants?
Yes 140
No 66


Guide Copy 32

Better Service to higher variants?

No, 66
Yes
No
Yes, 140

5.2 ANALYSIS USING SPSS

Here, we try and find out if some relationship exists between two given variables

1. Service Intimations and Desired appointment time

Chi-Square Tests

Asymp. Sig. (2-
Value df sided)
a
Pearson Chi-Square 10.792 3 .013

Likelihood Ratio 13.733 3 .003

Linear-by-Linear Association 3.035 1 .081

N of Valid Cases 206

a. 2 cells (25.0%) have expected count less than 5. The minimum
expected count is 3.50.

Since the value of Pearson Chi-Square is less than 0.05, we reject the null Hypothesis
hence there is a strong co-relation between Service Intimations and providing the
desired appointment time

2. Unpleasant Experience and its Resolution by Manager


Guide Copy 33

Correlations

Unpleasant_Exp Reolution_by_M
erience anager
**
Unpleasant_Experience Pearson Correlation 1 .730

Sig. (1-tailed) .000

N 206 206
**
Reolution_by_Manager Pearson Correlation .730 1


N 206 206

**. Correlation is significant at the 0.01 level (1-tailed).

There is a strong positive correlation between the two variables.

3. Unpleasant Experience and Approached Forum

Correlations

Unpleasant_Exp Approached_For
erience um
**
Unpleasant_Experience Pearson Correlation 1 .304


N 206 206
**
Approached_Forum Pearson Correlation .304 1


N 206 206

**. Correlation is significant at the 0.01 level (1-tailed).

There is a weak correlation between the two variables.


Guide Copy 34

4. Timely Delivery and Providing better service to higher variants

Correlations

Timely_Delivery Partiality

Timely_Delivery Pearson Correlation 1 -.013


N 206 206

Partiality Pearson Correlation -.013 1


N 206 206

Negative correlation between variables

5. Cross Selling and Unpleasant experience

Correlations

Cross_Sell_Atte Unpleasant_Exp
mpts erience
*
Cross_Sell_Attempts Pearson Correlation 1 .162


N 206 206
*
Unpleasant_Experience Pearson Correlation .162 1


N 206 206

*. Correlation is significant at the 0.05 level (1-tailed).

Non significant positive co-relation


Guide Copy 35

6. OBSERVATIONS

 The mix of respondents was more in favour of Hatchback vehicles followed by
Sedan, SUV and MUVtype of vehicles pointing to the fact that most respondents
had cars in under 10lac range
 A good mix of vehciular brands responses were obtained wherein as expected
Maruti had the highest respondents followed by Hyundai, Honda and Tata Motors
 When it came to regular intimations to customers on the pending service, a large
chunk of 90 respondents ~45% said they did not get intimations
 Whenever a customer wishes to make an appointment, in majority of cases the
process is simple for him/her
 Service Advisor’s knowledge in dealing with the customer has met with a
mediocre response with almost 70% rating the expertise as average
 In most of cases, the customers got the appointment slot that they desired
 Customers seemed to be satisfied with the process of checking in the vehicle and
completing formalities of leaving their vehicle at service center
 Respondents have however complained that they were not updated constantly on
the progess made on their vehicle
 Majority of respondents having Maruti and Tata Motors seem highly satisfied
with availability of spares
 Punctual delivery of vehicle was being followed by majority of companies
 For extra work involved the communication was on the poorer side with almost
42% respondents saying that they were not advised on it
 Cross-selling other accessories seems to be a norm in most service centers
 Almost 45% of respondents are unaware of Ministry of consumer affairs’ Forums
 1/4th of respondents have had atleast one unpleasant experience at the service
station
 In half of the cases, the issue was resolved by the Manager
 However, in others a very few actually went ahead to Consumer Forums


Guide Copy 36

 A sizeable chunk (62%) of respondents say that they are ready to let go of a
marginally superior product if they are offered better service in the other
 Almost 70% of respondents feel cheated in the sense that they believe that
customers having better variants, models are served better than those not having
them


Guide Copy 37

7. CONCLUSION
 There is a larger population of consumers which prefer the hatchback variants for
traffic ridden Mumbai for multiple reasons which include ease of travel, lower
fuel consumption and more options to choose from
 Maruti still has the stronghold on Indian market but is closely followed by
Hyundai, Honda, Tata Motors etc
 Majority of Car Manufacturers have seemed to have gotten the service delivery
right and in most of cases have facilitated easy appointment and timely delivery
 Communication is one lacuna that the car companies must focus on. Customers
feel that they are kept in dark about progress being made on their car
 Even though the Ministry of Consumer Affairs has involved itself in aggressive
advertising, it still has not penetrated the car owners to full extent with a large
chunk still unaware of existence of norms for Car manufacturers as well
 The car owners choose to resolve the issue either with the center manager or
ignore the same. They are reluctant to take it ahead and make the issue noticeable
 Customers need assurance and the very fact that they are ready to let go of a
marginally superior product in leiu of better service reiterates the same point
 Differentition seems prevelant in minds of customer when it comes to servicing


Guide Copy 38

8. RECOMMENDATIONS

 Service Advisor’s knowledge in dealing with customer’s queries id dealt with
some issues. The advisors must thus be adequately trained in technical as well as
soft-skills domain to counter customer’s queries in a more appropriate manner
 Communication is another aspect that needs improvement. The customer can be
given a rough schedule which shows the approximate time it would take to
perform particular activity. Constant EOD updates by means of an SMS would
keep the customer interested in case the vehicle is kept at service center for more
than a day
 Car accessories are pushed to customers in a very aggressive manner. Even
though it seems to be important as additional revenue for service center, a more
subtle approach can be used by giving free samples and honest recommendations
 A feedback/suggestion matrix should be prominently displayed on the reception
to let the customer know that car companies value their opinion and they should
write to superiors in case of any issues
 There is a large class of audience who seeks better service. Car manufacturers
must take a notice of this aspect. General Motors is already having such a scheme
for their customers by providing three years of maintainence free service
 Customers need to be reassured that all service is carried on first come first serve
basis and in no way is a higher model given precedence over a lower variant


Guide Copy 39

9. BIBLIOGRAPHY AND REFERENCES

Books:

1) Marketing Research by Malhotra N.K. , fifth edition
2) Marketing Management by Philip Kotler

Websites:

1.http://www.businessweek.com

2. http://www.financialexpress.com

3. http://www.business-standard.com/

4. Ministry of Consumer Affairs http://fcamin.nic.in/

Magazines:

1) Autocar India
2) Motoring


Guide Copy 40

10. ANNEXURE
Questionnaire

1. What is your vehicle type?

 Hatchback
 SUV
 Sedan
 MUV

2. Which brand of car you own?

 Chevrolet
 Fiat
 Ford
 Honda
 Hyundai
 Maruti
 Mahindra
 Nissan
 Renault
 Skoda
 Tata Motors
 Toyota
 Volkswagen

3. Do you receive regular intimations through calls/sms for "service due" for your
vehicle?

 Yes
 No

4. The ease of contacting the service department to make an appointment.

 Excellent
 Good
 Average
 Poor

5. The service advisor's understanding of the work required when you booked the
appointment.


Guide Copy 41

 Excellent
 Good
 Average
 Poor

6. The availability of an appointment to suit you.

 Excellent
 Good
 Average
 Poor

7. The ease of checking in at service reception on the day you brought your motorhome in
for service/repair

 Excellent
 Good
 Average
 Poor

8. Communication during service/repairs to keep you updated on progress

 Excellent
 Good
 Average
 Poor

9. Availability of Spares

 Excellent
 Good
 Average
 Poor


Guide Copy 42

10. Was your vehicle ready for collection at the agreed time?

 Yes
 No

11. If you were advised that further work was required at a later date were you were fully
informed of the reasons why and either booked in for that work or advised that you would
be contacted when the necessary parts arrived in stock?

 Yes
 No

12. Do the customer service executives try to cross-sell other car accessories?

 Yes
 No

13. Are you aware of consumer forums by Ministry of Consumer Affairs?

 Yes
 No

14. Have you ever had an unpleasant experience at the service center ?

 Yes
 No

15. If yes, was it resolved by service center Manager?

 Yes
 No

16. In case of escalations, have you approached these forums?

 Yes
 No


Guide Copy 43

 Not Applicable

17. If given a choice, would you go for a product offering better service even though you
might want a different product?

 Yes
 No

18. Do you believe that better service is provided by your car manufacturer for expensive
variants?

 Yes
 No


Project Report: After Sales service of Automobiles in India

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