Customer Retention in the Automotive Industry: Quality, Satisfaction and Loyalty

The intensely competitive global automotive industry is in the midst of both a quality evolution and management transfonnation. In an evolutionary fashion, industry attention has progressed from a focus on internal quality, to external perceptions of customer satisfaction, to subsequent customer retention and profitability. More transfonnational is the change in the way automotive companies operate and manage themselves. An industry once dominated at a product level by engineering and a management level by fmance is becoming a cross functional, customer oriented industry. Understanding the links from quality to satisfaction to retention has become a key to financial and organizational success as the automotive industry enters the new millennium. We are fortunate, in this regard, to have assembled a diverse group of both academic and automotive industry contributors to offer a variety of insights into these links. After describing the ongoing changes in the automotive industry in more detail, this introductory chapter describes a framework for linking quality, satisfaction, and retention. The framework is used to introduce each of the individual chapters and highlight its contribution. Although our primary emphasis is on the automotive industry, the implications of the research and lessons learned extend far beyond. If anything, the automotive industry is a prototypical competitive, global industry that faces a myriad of business issues. These include, among others, issues pertaining to product development, service development, process improvement, product quality, service quality, supplier relationships, internal customer satisfaction, external customer satisfaction, retailing, promotion, pricing, franchising, and technology management.