The COVID-19 pandemic has taken a $2.6-billion bite out of Canada’s automotive service industry, according to a new study by J.D. Power Canada.
The 2021 Canada Customer Service Index — Long Term Study shows that the service market for vehicles four to 12 years old has fallen to $6.6 billion in 2021 from $9.2 billion in 2020. It attributes the drop to a reduction in kilometres driven spurred by work-from-home measures and other pandemic restrictions, as well as a shortage of service options in some markets.
The number of service visits dropped by 20 per cent year over year, and of the service visits remaining, aftermarket service shops not only captured the majority of customers (54 per cent), the aftermarket also increased its market share to 44 per cent of total industry revenue from 40 per cent in 2020. J.D. Power said this reverses a trend that had shown new-vehicle dealerships increasing their share of service business.
The news wasn’t entirely gloomy, however. J.D. Ney, the automotive practice lead at J.D. Power Canada, said some of those service visits were more valuable than previously.
“We’re seeing the effect of broader macro-economic forces in the automotive space,” he said in a news release. “Besides the decline in service visits and revenue, there is a bright spot for the service business. Many vehicle owners opted to make more expensive repairs to their current vehicle rather than trade it in for a new vehicle or absorb the added cost of a pre-owned vehicle, where we’ve seen prices soar lately.”
The study also ranked customer satisfaction on a scale of 1,000 points: overall satisfaction with dealerships and non-dealership service operations ranked 791, which is unchanged from 2020. Satisfaction was higher with non-dealerships at 796 than with dealers at 786.
Audi dealerships ranked highest in overall customer satisfaction at 825 point (also out of 1,000 points), with Great Canadian Oil Change (823) and Volkswagen dealerships (817) rounding out the Top 3.
The study measures satisfaction and intended loyalty among owners of four- to 12-year-old vehicles and analyzes customer experience with warranty and non-warranty work. It was based on the responses of 8,101 owners and was conducted between April and June of 2021.