Feb 03, 2009 05:00 ET
Dealerships Are Key to an Auto Industry Turnaround, States New Report from Arthur D. Little
LONDON --(Business Wire)-- Feb 03, 2009
A new report released today by management consultancy Arthur D. Little
warns OEMs that they must do more to achieve customer brand loyalty at
the retail level, and predicts that dealerships will be the cornerstone
of automotive brand building in the future. With 2008 new car sales
having reached record lows in most developed markets, global automotive
companies are under more pressure than ever to avoid collapse. Nearly
80% of all car purchases are still done face-to-face, Arthur D. Little’s “Delivering
the Brand,” warns that as the industry faces a growing number of new
competitive pressures, global automotive brands must develop dealership
management initiatives to ensure their retail networks are building and
reinforcing brand loyalty from the test drive through to after sales
service.
According to Arthur D. Little’s latest report, even before the full
impact of the global credit crisis hit the automotive industry in the
second half of 2008, the sector faced major changes to its competitive
arena, which were brought about by: regulatory pressure on CO2
emissions, international safety standards, high oil prices, and changing
customer lifestyles. Competition amongst global players has been pushed
even further as a dramatic increase in overall vehicle quality over the
past decade had progressively weakened the role of the product itself as
the key differentiator.
Fabrizio Arena, the report’s author and a Senior Manager in
Arthur D. Little’s Global Automotive & Manufacturing Group,
commented on the report’s key findings:
"Dealerships have a major role to play in delivering an excellent brand
experience that will attract new customers and retain the existing base.
Despite product differentiators, more responsibility for the customer’s
overall brand experience must lie with the dealer, and automotive brands
are ultimately reliant on their dealer networks to manage customers’
in-store buying experience from start to finish in order to build the
global brand.”
Improving the brand experience
Based on an analysis of and research into each aspect of the automotive
purchasing experience, Arthur D. Little’s latest report outlines a four
step approach for global automotive brands to manage customer
satisfaction through their retail networks. Ensuring results and
investment decisions are consistent with customers’ expectations and its
dealerships’ capabilities are key to implementing an effective global
brand strategy that will reinforce the products’ desirability through a
positive customer brand experience.
Fabrizio Arena continued:
"To be successful, a global customer satisfaction improvement program
for the automotive industry requires a clearly defined relationship
between the OEM headquarters and the local market profit center (local
branches). Defining roles and setting consistent, measurable targets
will allow local branches to adapt the corporate brand strategy into the
local market context in a meaningful way.
Citing an example from the report, Arena concluded:
“Customer satisfaction is an urgent concern for OEMs looking to move
ahead of their competitors in an environment where simple survival is
every brand’s primary objective for the year ahead. By adopting such an
approach, a local branch of a world-leading OEM we’ve worked with has
improved its customer satisfaction performance by approximately 16% in a
single year, and moved up several places in the New Car Buyers’ Survey,
a key industry benchmark.”
The aim of Arthur D. Little’s report is to offer OEMs the full range of
considerations necessary to successfully implement a brand strategy that
links product performance with customer experience satisfaction. With
the credit crunch forcing unprecedented competition for those consumers
still on the market for a new car, loyalty and retention programs must
be a vital element of a global OEMs survival strategy.
Delivering the Brand is now available for download at www.adl.com/delivering_the_brand.
-Ends -
About Arthur D. Little
Arthur D. Little (ADL), founded in 1886, is a leading global management
consulting firm that links strategy, innovation and technology to master
complex business challenges while delivering sustainable results to our
clients. Arthur D. Little has a collaborative client engagement style,
exceptional people and a firm-wide commitment to quality and integrity.
ADL is proud to serve many of the Fortune 100 companies globally in
addition to many other leading firms and public sector organizations.
If you would like additional information on the firm, please visit www.adl.com.
Arthur D. Little
Fabrizio Arena
Tel: +39 06 68882.1
Mob:
+39 335 1232387
arena.fabrizio@adlittle.com
or
Say
Communications
Sue Glanville/Maita Soukup
Tel: +44 (0)208 971
6423/6421
sglanville@saycomms.co.uk
msoukup@saycomms.co.uk