- Improved vehicle quality spurs move to improved service offering
- Customer experience takes front seat
SEOUL 12 June 2003 - Approximately 40% of the total cost of ownership for a new car goes toward maintenance and after sales service - almost as much as the cost of buying the car in the first place. For vehicle manufacturers, therefore, the service side of their operations is at least as important as the business of making and selling cars.
Kia Motors has traditionally focused on the sales side of the business, but as quality levels improve and the company works to improve the customer experience, service is enjoying greater share of the corporate mind.
"Korean companies generally see after-sales service as a value-adding activity rather than as an integral part of the business," says Mr Park Hong, director of Kia`s overseas service group. "As Kia becomes more global, however, we are looking for ways both to improve the level of service we offer as a way to increase customer retention and loyalty."
For Kia, this means an overhaul of the service operation and a number of initiatives to improve standards across the board, from the appearance of the workshops to the retention of top quality technicians.
"We`re listening both to our customers and to our technicians," says Mr Hong. "At the consumer end we`re aiming to improve performance sufficiently to raise our customer satisfaction index to a global average of 84% by 2004. That`s a ten point increase over today."
To achieve this, Kia is investing heavily in developing its global team of service technicians. Kia maintains nine training facilities around the world and will shortly be supplementing these with on-line training resources. A biennial global service skills competition helps keep technicians motivated.
Supporting the technician in the field is an expanding technical hotline service that currently covers the United States and Europe. "The hotline service will be extended globally," says Mr Hong, "to provide a greater level of support to our worldwide network of service technicians."
Kia is also branding its service operation to encourage customers to return to authorized service centers. "While Kia offers one of the most competitive warranties on the market, we want customers to come back to Kia even for non-warranty repairs," says Mr Hong. "The Kia Pro-Service brand encourages customer loyalty and ensures that a Kia customer remains a Kia customer for as long they drive a Kia car."
Yong-Hwan Kim, Kia Motors COO and head of the international business division, relates the service operation to the improved quality of Kia cars. "In the last five years, Kia`s quality ratings as measured on the J.D. Power initial quality survey have moved from 330 down to 168, brining us within striking distance of the industry average," he says. "That makes Kia one of the fastest improving brands on the market."
He acknowledges, however, that Kia still has a way to go. "Consumers are generally more critical of quality issues in a value car," he says. "That simply means that we have to do better to ensure that our customers get the best car we can possibly provide. Vehicles like the Carnival and Sorento are going a long way toward improving the image of a Kia car as combining value and quality."
Providing a quality service offering to support these new cars reinforces the perception among Kia customers that they made the right choice, says Mr Kim. "Customer loyalty is about providing a great product and being there to service that product. That`s the difference between making cars as a commodity and making cars that people really want to buy."
Founded in 1944, Kia Motors Corporation (www.kia.co.kr) is Korea`s oldest manufacturer of automobiles. A part of the Hyundai Automobile Group, the company currently sells more than one million vehicles per year worldwide and maintains a network of distributors that covers 190 countries. Kia Motors is the major sponsor of the Australian Tennis Open and the international sponsor of the Davis Cup for the Euro/Africa zone.
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