INDUSTRY TRENDS

Service Satisfaction on the Rise

Consumer satisfaction with dealership service continues to rise, even as customers are paying for more service work themselves instead of relying on factory warranties, according to the J.D. Power and Associates 2007 Customer Service Index.

The average vehicle brand achieved a satisfaction score this year of 876 on a 1,000-point scale. That was up from 873 in 2006 and 843 in 2002. Automotive News reports that the proportion of surveyed customers who say they paid for all service work themselves has slightly increased, from 49 percent in 2004 to 52 percent in 2007.

Another Record-Breaking Year for Hybrid SaleS

An estimated 187,000 hybrids were sold in the first six months of 2007, accounting for 2.3% of all new vehicle sales, according to J.D. Power and Associates. Although a sales slowdown is expected in the second half of the year, J.D. Power is forecasting total sales of 345,000 hybrids for the year, a 35% increase from 2006 when the current record of 256,000 hybrids were sold. The Toyota Prius continues to be the best-selling hybrid model, accounting for just more than half of all hybrids sold. Prius sales also got a boost this year from incentives of up to $2,000 per vehicle, which helped offset a decrease in federal tax breaks for hybrids.

Competition in the segment will intensify in the coming years. There will be as many as 65 hybrid models, more than half of them trucks, in the market by 2010, with projected sales of nearly 775,000.

Manheim Says Used-Vehicle Market Strong, Stable

Evaluating the industry’s health at the mid-year point, Manheim’s chief economist Tom Webb characterized the retail used-vehicle market as strong and stable, while also praising automaker efforts to rein in excessive inventory levels of new cars that have plagued the industry in recent years, Auto Remarketing reports. Webb said the current round of factory incentives has had a minimal impact on wholesale prices.

–In terms of the vitality of the retail used-vehicle market, it’s a good market,” Webb noted. –Certainly, an increasing number of dealers are buying an increasing number of vehicles at auction, which means they obviously have a retail market for these vehicles. Because of the higher acquisition costs from a dealer standpoint, there is some pressure on margins. However, their inventory turn has been good, so that has offset it.” Webb remains upbeat about the current health of U.S. economy, which he said portends well for the retail used-car market.