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Honda Aus questions JD Power results

Safe bet: Honda Australia director Stephen Collins says the company has led the industry when it comes to handling the massive Takata airbag recall.

Handling of airbag recall shows Honda Aus strong on service: Collins

6 Dec 2016

UPDATED: 12/12/2016HONDA Australia director Stephen Collins has questioned the validity of the annual JD Power Customer Service Index (CSI) after results from the latest independent survey saw the Japanese brand drop from first to sixth place among rivals within just 12 months.

Speaking with GoAuto at a media event in Melbourne this week, Mr Collins took issue with the sample size used in the survey and said the car-maker utilises data from a greater number of customers to measure its own performance internally.

He also used Honda Australia’s bounce in the JD Power CSI study from seventh in 2014 to first in 2015, before falling back to sixth this year, to suggest all may not be well with the survey.

“In any survey where you bounce from seven to first to sixth, it seems a bit odd,” Mr Collins said.

“We don’t subscribe to JD Power survey (but) we do of course subscribe to many syndicated surveys that have much, much, much bigger ongoing sample sizes.

“We’re very comfortable that in all our syndicated surveys – and these are surveys of 70,000 to 80,000 people and not just Honda buyers but competitors as well – that we are generally in the top three in terms of sales and service satisfaction.

“Why it (JD Power CSI) would jump from seven to first to sixth in three years is a bit beyond me.”

He explained that based on Honda Australia’s market share in the new-vehicle market, the JD Power CSI sample size of 4666 would mean surveying around 180 customers when the brand’s dealerships perform 200,000 services per year.

Mr Collins added: “I wouldn’t say we’re particularly concerned about it.

“I think we’ll have a look at it, but we’re pretty comfortable that our dealers deliver a very good sales and service experience.”

As reported, in JD Power’s key factors – overall satisfaction, service initiation, service adviser, service facility, vehicle pick-up and service quality – Honda Australia fell to average in each respect, and below average overall. The brand dropped behind Mazda, Toyota, Subaru, Kia and Hyundai – in that order – with a score of 806 points falling below an average of 809 among the vehicle brands.

In response, JD Power senior country manager (Australia) Loi Truong said: “JD Power has been providing ‘voice of the customer’ feedback since 1968, covering multiple industries globally for nearly 50 years. The company is focused on providing independent benchmark studies that help businesses determine the drivers of customer satisfaction.

“Indeed, as automotive companies in Australia work ever harder to improve the customer experience with the products, sales and service offered, the 2016 JD Power Customer Service Index shows that the Australian market is more competitive than ever with the top four brands within 22 points (on a 1000-point scale) of each other.

“In such a competitive market, it is not usual to see the rank position of brands change five or six ranks from one year to another. Given the sample sizes of over 200 per brand, these shifts can be significant. When the industry is moving fast, if a brand does not improve on the JD Power Index, it is not uncommon for them to be left behind, particularly if the trend continues over time.

“Indeed, the 2016 study showed Honda’s CSI performance declined this year by 10 index points, causing their top rank position in 2015 to drop to sixth place this year as several other top performers saw larger increases (Mazda, Toyota and Subaru all increasing their performance by +21, +17 and +16 index points respectively from 2015).”

Mr Truong added: “Most importantly, the design of the JD Power Australia CSI study is executed with the same methodology in over 10 countries and has a history of over 30 years in some markets. The study covers ownership of vehicles of up to five years and service conducted at an authorised dealership, which may be differ to other studies conducted in Australia. Hence the study constructs may differ to other studies in the market, but the approach and quality of research keeps within the global standards set by the company.

“JD Power prides itself in assisting automotive brands to improve customer experience. Through measuring the voice of the customers, we are focused on helping OEMs, distributors and dealers to determine how best to improve the experience offered to their customers.”

 center imageLeft: Honda Australia director Stephen Collins.Asked what aspect of Honda Australia dealerships could be improved regardless of the JD Power CSI results, Mr Collins instead nominated the brand’s handling of the Takata airbag recall as an example of how well it interacts with customers.

“We always want to improve the experience of customers at our dealerships,” he said.

“One of the big issues we’ve had to deal with is the airbag recalls (and) in the last number of months our dealers have, per week, been changing over on average about 7000 airbag inflators. I think we peaked at just under 10,000 in a week, which is very, very significant.

“So making sure we deliver a good experience to those customers as well as customers coming in for a service is important (and) I honestly believe we’ve taken a real leadership role in the whole recall issue.”

Mr Collins revealed that Honda Australia’s Tullamarine warehouse was “full of” replacement airbag inflators, with 600,000 faulty units requiring replacement on 425,000 Honda vehicles – about half of which had been completed.

He implored journalists to tell Honda owners to check their VIN number on the brand’s website as several owners have been contacted to participate in the critical safety recall – which if unchanged could result in metal fragments being deployed with an airbag during a collision – without a response.

Honda Australia has since April initiated, at its own cost, a 24-employee call centre to specifically handle the Takata airbag recall issue that Mr Collins said is “going to be ongoing for a considerable amount of time”.

If dealerships continue to change the faulty inflators at a rate of 7000 per week, it means the recall would last almost another year, with the Honda Australia director confirming “we would be the biggest” brand affected by the Takata saga.

He added that he could not say if the JD Power results were influenced by the airbag recall, however other points of long-term ownership contention such as servicing intervals, had been analysed and addressed, although a longer warranty remains off the cards.

“We introduced with HR-V and Civic, and we’ll introduce with full model changes one-year (servicing) intervals, still 10,000km but one year rather than six-month intervals,” Mr Collins said.

“In terms of terms of warranty we have no plans at this stage to push out the warranty. We’ve got a very strong reputation for reliability, we never take that for granted, but at this stage we don’t plan to change that.

“We don’t get feedback from our dealers, or our customers that that’s a particular issue.”

Honda’s three-year/100,000km warranty has fallen behind the likes of Hyundai (five-year/unlimited kilometre) and Kia (seven-year/unlimited kilometre), with both South Korean brands trumping the Japanese marque in the JD Power CSI.

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