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Old 25th April 2013, 06:46   #1
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Default Maruti asks dealers to focus on "Service" as car sales go down

From the Economic Times:
Quote:
In a new slowdown strategy for its distribution network, car market leader Maruti SuzukiBSE 2.41 % has been advising dealers to focus on service to ride out the slump in new car sales. With the service business expected to grow 20% over the next three years — in sharp contrast to the new car sales industry which is in de-growth mode — the company is looking to bank more on service rather than sales to keep its channel partners solvent and profitable through the downturn.

Article Link:

http://economictimes.indiatimes.com/...w/19704026.cms

So, service rate hike on the cards ?

I guess, being a customer is not enough nowadays.

Being a customer, who spends money on after sales and service is the key to get any attention from the manufacturers- irrespective of quality of the product.

Last edited by noopster : 25th April 2013 at 11:22. Reason: Added extract from article. Also renamed the thread
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Old 25th April 2013, 08:32   #2
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Default

Quote:
Originally Posted by rohit0103 View Post
http://economictimes.indiatimes.com/...w/19704026.cms

So, service rate hike on the cards ?

I guess, being a customer is not enough nowadays.

Being a customer, who spends money on after sales and service is the key to get any attention from the manufacturers- irrespective of quality of the product.
This is certainly not a new development. Service industry has witnessed constant growth over the years, and manufacturers have been fighting tooth and nail to protect their share.

Case in point-

Avoiding over-the-counter sales of authorized spare parts. If a car is out of warranty- it should be upto the owner to decide where to get his car serviced. Some manufacturers try to dissuade this by preventing dealers from selling spares directly.
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Old 25th April 2013, 09:29   #3
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Default Re: Sales ="Stock Market", Service = "Term Deposit" - Maruti. Customer= Cow or Fools

Expect more number of problems quoted by the service center during the next visit.
During one visit to a tata service center, the SA mentioned 10 problems on my car. When i challenged and ask for details, he started dropping one by one. At the end, i got my car serviced without changing any part. This happened 2 years back. From that day, i skipped tata and went to Bosch. The parts changed in last 3 services are just few bolts and filters.
And the car is doing fine.
In another case, another Tata service center quoted 10K for alternator problem. they informed me that I have to replace alternator. I took my car to a local workshop whom I know. He did the repair of alternator for Rs 500 (replaced diodes) . it is doing good even after 5 years.
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Old 25th April 2013, 09:51   #4
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Default Re: Sales ="Stock Market", Service = "Term Deposit" - Maruti. Customer= Cow or Fools

I believe the minimum wages act is taking its toll on the dealers and the manufacturer too wants its dealers to be happy in money making and the rate hikes are the way out.

But the dealers make quite a bit of money on the spares which sort of motivates them to replace rather than repair. And to add to it, it helps in getting labour revenue as well. But the customer should be given an option of picking genuine spares from the dealer and get the work done outside the service centers at least once the warranty period is completed.
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Old 25th April 2013, 11:17   #5
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Default Re: Sales ="Stock Market", Service = "Term Deposit" - Maruti. Customer= Cow or Fools

Yep the ASS make a fair bit of money on Spares but there are other reasons for not repairing equipment, like

1) Warranty - The newly replaced spare with come with warranty and the part will last longer than a repaired part in general. Yep too had my, Turbo, alternator and various AC parts repaired many times outside at a local garage for much less but these parts have over time always required to be repaired again and again. Yes if one is going to keep the car for 1-2 more years then it is fine but if the plan is for longer then getting the part repaired is cheaper on time and effort if not money.
2) Repairing a part at the ASS is time consuming and prevent them from moving out vehicles fast. Yes in India as yet labour is relatively cheaper but the practices that Auto companies deploy tend to be similar globably and in most places in the so called Western World labour is too expensive to be used to repair stuff unless it a rare part from a classic car. So the trend is to just replace parts.
3) The Manufacturers on their part tend to make more and more parts easily to replace by providing smaller and smaller component parts of the full. Yet frankly they have a long way to go in this.

No am not disagreeing with the view points that Authorized service centre dont do enough to repair components, it is just that they tend to follow guidelines that does not encourage this.

Yet there are some ASS that will send out certain high value parts to repair outside but ofcourse not warranty the repair and will inform us that this is being done at our risk. This costs less then a replacement but more than a local garage repair.

At TATA - I have had the ASS send out my Power Steering motor for repairs to the manufacturer of the part and provide me a refurbished unit at half cost. Also once when a door latch that they planned to replace was not in stock - with me having an outstation trip planned the next day- They repaired the Latch and it has been a year and is still fine. At another point of time though they replaced the latch on another door with the same fault instead of reparing it - I did not complain as it was within warranty.
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Old 25th April 2013, 11:25   #6
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Default re: Maruti asks dealers to focus on "Service" as car sales go down

Does the labour rate changes with service centers of the same company? Like, for eg. can one Maruti ASS can have different rates for the paid service from another MASS?
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Old 25th April 2013, 11:28   #7
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Default re: Maruti asks dealers to focus on "Service" as car sales go down

This is a principle of business that is pretty universal. Some call it "lifetime value of customer". Of course it increases upseels, cross-sells etc. but for a product like a car which is not purchased repetitively (at least in our country, for the most part) it makes sense that the dealer would focus on service which is assured revenue at least once a year, typically.

I have already experienced this the last time I gave the Swift in for servicing. Within minutes of putting a Justdial request for authorised MAS in my area, I received 4 calls all soliciting business and offering to pick up/drop my car for free. As a consumer I am happy they want my business and are offering me the best deal. The caveat is that if you give them free rein, they are likely to rip you off. My SA started off with a quote of 9000 for a simple 80K km service then after we discussed each item, I managed to bring it down to under 700/- for the basic service.

So caveat emptor!

To OP: there is no reference to "service rate hike on the cards" in the article linked. This seems to be speculation on your part.
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Old 25th April 2013, 11:35   #8
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Default Re: Sales ="Stock Market", Service = "Term Deposit" - Maruti. Customer= Cow or Fools

Quote:
Originally Posted by nkrishnap View Post
But the dealers make quite a bit of money on the spares which sort of motivates them to replace rather than repair. And to add to it, it helps in getting labour revenue as well. But the customer should be given an option of picking genuine spares from the dealer and get the work done outside the service centers at least once the warranty period is completed.
The way I see it, it is the dealers who are at the receiving end due to this and not Maruti. Since there is a slow down in sales and the heavy discounts in offer, dealers are unlikely to stay over water without income from service. I guess this is Maruti's way of telling them they need to improve their service levels if they need customers to go back to them.

In case of Maruti, they allow the sales of MGP over the counter and actually have dedicated outlets in many cities giving the customer the choice of where he wants to service his car once warranty period is over. This puts more pressure on the authorized service stations since the customer is not forced to go there for service due to genuine parts availability.

For Maruti, it doesn't matter if the customer services his car in A.S.S or outside as long as they use the genuine parts since this revenue is not impacted. Since they make MGP easily available over the counter, even most FNGs rely on the same.

For manufacturers who try to force customers to the dealer network for genuine parts, customers would start looking for quality alternatives like Bosch once warranty is over and hence even the parent company starts losing out the revenue from spare parts.
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Old 25th April 2013, 11:44   #9
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Default re: Maruti asks dealers to focus on "Service" as car sales go down

Maruti surely earns a lot of money by servicing the millions of cars sold all these years. Out of these there are many which are over 5 - 10 years old and progressively need more maintenance. This would mean higher earnings for both their MASS and ultimately Maruti.

Also by and large their customers have been flocking to MASS for their servicing needs but lately some of these centers have started systematically over charging customers without their own knowledge.

This is leading to irate customers who are moving to their local garages where the charges and taxes are much lower and with the spares available freely, it could be just procured and repaired by competent mechanics many of whom would have hived off a MASS itself.

Now to retain their turf in the servicing segment, Maruti should not only lure customers to them with promise of good servicing but also ensure that good practices are followed so that the customers do not feel ripped off at the end.
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Old 25th April 2013, 12:29   #10
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Default re: Maruti asks dealers to focus on "Service" as car sales go down

With this new trend I expect more impact on warranty claims citing that standards vehicle configuration has been altered by third party service garages. I would like to see the below mentioned things to be implemented by SIAM/ARAI (or is there something like this already in place which I'm unaware of ?).

1. Some authority to check the service quality/charges and assure that customers are not over charged.
2. Assessing the Brand Quality/Ranking based on the number of part replacements done during warranty period.
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Old 26th April 2013, 17:33   #11
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Default Re: Maruti asks dealers to focus on "Service" as car sales go down

I do not understand why "focusing on service" pretty much translates into "ripping customers off". IMHO, this could also mean that the dealers have to concentrate on getting back customers lost out to local garages. Customers resorting to local garages for servicing leads to a huge revenue loss to the dealers. When in good times, the dealers are generally more intent on sales of new cars, it only makes sense to them that they concentrate on service when the market is slow. Having said this, I do not deny that the dealers would end up trying to rip a customer off, but this would happen irrespective of the market scenario.
Secondly, the labour rates are not the only factor which discourages the dealer from repairing a faulty part and makes him replace the same. A workshop runs on limited number of service bays and per bay productivity would decrease. This costs the dealer more than his actual labour costs.

Quote:
Originally Posted by saket77 View Post
Does the labour rate changes with service centers of the same company? Like, for eg. can one Maruti ASS can have different rates for the paid service from another MASS?
AFAIK, the rates for labour are fixed by Maruti and is standard to all MASS'
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Old 26th April 2013, 20:56   #12
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Default Re: Maruti asks dealers to focus on "Service" as car sales go down

At a time when the automobile market is in the doldrums it makes sense for Maruti to point MASS in the direction of after sales service for revenues . However they should make sure that this does not lead to exploitation of the customer. If they offer Value for money instead of inflating the bill with unnecessary expenditure they will succeed in their objective.
If not, in the long run, more customers will migrate to the Grey market and they will literally be killing the goose which lays the golden egg!
Regards,
Ashok
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Old 26th April 2013, 21:31   #13
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Default Re: Maruti asks dealers to focus on "Service" as car sales go down

Customer is now the king when it comes to buying a new car.
But when it comes to service there is still a lot to be desired. I have been going to MSM for services of my Alto (Next visit due in May when I complete 80000 KMs). It is a maruti owned & operated service centre. At MSM also I have seen them ripping or customers. Along with general service they will alway add few add on. Tell them one issue & the solution alway lies with changing part.Once i reported that i feel clutch is a bit hard, pat came reply 'sir 70K ho gaya hai isliye hard hogaya hai. change karna padega' I told that there there is rattle is the back side. He suggested to get the suspension overhauled. They think that they are Know alls. NO investigation is need to identify the cause.
When I got it checked from outside mechanics (two different one) both of them were of opinion that it is pretty Ok.
TO them customer is like a cow, ready to be milked. Honest opinions are hard to get by.
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Old 28th April 2013, 07:46   #14
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Default Re: Maruti asks dealers to focus on "Service" as car sales go down

The perception of a low cost of ownership of a Maruti car is what gets Maruti the most customers. If they decide to fleece the customer through escalated service bills then surely their market share will begin a descent; a descent that can only go down faster. Let Maruti Udyog be wisely warned to not indulge in such cheap gimmicks that have had very detrimental effects on other manufacturers already. I was royally milked on my last visit to a MASS. This will have a big impact on my next car decision, for sure.
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Old 28th April 2013, 08:39   #15
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Default Re: Maruti asks dealers to focus on "Service" as car sales go down

This focus by Maruti should not be stretched far by the dealers in fleecing and squeezing of the customer. Already dealerships have increased routine and KM specific servicing charges to Rs 1060 from Rs 660 recently and this enormous hike has gone unnoticed. Many dealerships also thrusts other extraneous unwanted services like additives, engine flush & de-carb on unsuspecting customers. We need to be really careful.

Last edited by rajeev k : 28th April 2013 at 08:41.
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