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JOURNAL: International Journal of Quality & Reliability Management

VOL/ISSUE NO: 35/9
ARTICLE NO: 615436
ARTICLE TITLE: Achieving better revenue and customers’ satisfaction with after-sales
services: how do the best branded car dealerships get it?
AUTHORS: Miriam Borchardt, Marcelo Souza, Giancarlo M. Pereira and
Claudia V. Viegas

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IJQRM
35,9
1 How do the best branded car dealerships get it?
Received 5 February 2017
Revised 26 April 2017
Accepted 9 June 2017
International Journal of Quality &
Reliability Management
Vol. 35 No. 9, 2018
pp. 1-24
© Emerald Publishing Limited
0265-671X
DOI 10.1108/IJQRM-01-2017-0016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0265-671X.htm
Achieving better revenue and
customers’ satisfaction with
after-sales services
Miriam Borchardt
Universidade do Vale do Rio dos Sinos, Sao Leopoldo, Brazil
Marcelo Souza
Department of Production Engineering, Universidade do Vale do Rio dos Sinos,
Sao Leopoldo, Brazil, and
Giancarlo M. Pereira and Claudia V. Viegas
Universidade do Vale do Rio dos Sinos, Sao Leopoldo, Brazil
Abstract
Purpose – Branded car dealerships with best revenue by serviced car also have the best after-sales
customers’ satisfaction level. The purpose of this paper is to present the analysis of the after-sales quality
management practices adopted by dealerships with the best performance in terms of customer’s satisfaction
and revenue and how such practices contribute to these results.
Design/methodology/approach – A multiple case study was performed with nine leader branded car
dealerships in an emerging country, considering the entrance car. The performance indicators to evaluate
customers’ satisfaction, revenue and operational indicators related to product support, brand manifestation
and relationship with customers were identified. Quality management practices that support the best results
achievement were analyzed.
Findings – The three dealerships that represent Asiatic brands have best customers’ satisfaction and
revenue performance. These dealerships typically have different processes comparing with dealerships that
represent European and American brands concerning to: continuous improvement management; warranties
and stock management; services scheduling; offer bonuses to customers; and customers service that
emphasizes focus on technical and commercial expertise.
Originality/value – This research considered indicators performance and, based on that, analyzed the
dealerships’ practices that support the best performance. Such aspect has room for academic literature since
the quality management research related to car industry focuses mainly on manufacturer and generates
managerial insights to the car industry and its dealerships.
Keywords Quality management, Customer satisfaction, Revenue, Car industry, After-sales, Car dealership
Paper type Research paper
1. Introduction
This research took in consideration three main aspects. The first is related to the relevance
of after-sales services to automotive industry. After-sales are a more stable revenue
source than products (Godlevskaja et al., 2011; Kurata and Nam, 2010), what could
compensate the volatile product business through long-term relationship with customers
during the products life cycle (Fischer et al., 2010). Authorized dealership in automotive
industry is linked to facilitating sales and ensuring provision of after-sales services to its
customers, influencing the purchasing decision and brand association (Edvardsson et al.,
2010; Ahmad and Butt, 2012; Fraser et al., 2013).
The other aspect concerning this research considers gaps pointed out in the academic
literature. In this sense, the automotive industry is becoming more oriented to offer
product-service composition shifting their business paradigm from being manufacturing
powerhouse to a service-centered company (Ahmad and Butt, 2012). However, some cars
 dealerships work within a mental model of technical expertise rather than a mental model of After-sales
customer service in order to achieve the objective of servicing the cars (Wägar, 2011). services
It could be added that while the manufactured quality of cars has greatly improved
over the past few decades, the quality provided by dealerships is still being questioned
(Fraser et al., 2013). Reinforcing this point, the total quality management (TQM) practices
and its relationship with the performance of service companies need a deeper investigation
(Psomas and Jacas, 2016). Complementarily, few papers discuss the contribution of quality 2
management within the context of competitive advantage (Elshaer and Augustyn, 2016) and
focus on understanding how quality management practices enhance the performance of
service business (Mehra and Coleman, 2016).
The last aspect considers the discrepancy between after-sales branded car dealerships’
performance in an emerging market. What calls the attention is that the total passenger cars
Q1 sales, in Brazil – where this research took place, decreased 24 percent in 2015 (comparing
with 2014) (ANFAVEA, 2016) but one Asiatic brand increased its sales in 11.2 percent; the
two others, also Asiatic, decreased 6.1 and 8.7 percent. The others competitors decreased
their sales sharply: between 16 and 42 percent. An analysis of these top 9 brands dealerships
(exhibited at Section 4), restricted to the entrance car, indicated that these three Asiatic
dealerships with better performance in sales also have higher customers’ satisfaction
level concerning after-sales service and higher revenue per serviced car (Section 4).
Such managerial data signalize that some dealerships could be managing their after-sales
services better than others, reinforcing the need of deeply understanding regarding what
they do and as well as the contribution or results of such practices to the dealerships.
This research considers the contribution of after-sales to the automotive industry in an
emerging market with severe global brand competition. Also, it takes into account the need
to understand what and how quality management practices adopted by branded cars
dealerships enhance the quality of their services (Fraser et al., 2013; Mehra and Coleman,
2016; Psomas and Jacas, 2016) and increase revenue and customer’s satisfaction
(Edvardsson et al., 2010; Elshaer and Augustyn, 2016). The aim is to analyze the quality
management practices adopted by dealerships with the best performance in terms of
customer’s satisfaction and revenue and how such practices contribute to these results.
A multiple case study was performed with car dealerships that represent the nine top car
brands in Brazil. The managerial expected contribution of this research is the identification
of the best practices and their contribution to the dealerships’ performance. In academic
terms, the understanding what is done to improve customer’s satisfaction and revenue, how
and why could contribute to go ahead in terms of quality management practices applied in
after-sales services.

2. Theoretical foundation
2.1 After-sales: relevance
Service systems provided by dealerships, including after-sales services, could be understood
as a visible aspect, in which customers interact with human, technical and physical
resources of the service provider and other customers (Kurata and Nam, 2010). Also, there is
an invisible aspect which includes the overall organization and its systems (Fraser et al.,
2013; Wägar 2011).
Although the service experience at dealerships is not fully determined by the automotive
companies, they can and really influence the service process in several ways. First, they
impose guidelines and service standards on their dealerships based on manufacturer
policy deployment (Edvardsson et al., 2010). Second, they can facilitate the service quality
delivered by dealerships through a wide range of managerial interventions, e.g., by setting
up parts pooling mechanisms, sharing information, using vendor-managed inventory and
implementing a generous parts return policy for dealerships. Third, automotive companies
IJQRM usually set up incentive programs, whereby a dealership’s compensation is, in part, based
35,9 on service performance. Finally, the service network design (e.g. the definition of the number
of dealerships) is ultimately defined by the automotive companies (Fraser et al., 2013).
The after-sales economic relevance to the car industry can be illustrate by the data from
Daimler AG and VW (referring to 2008): 8–20 percent of profits from new car sales;
10–11 percent comes from second-handed car sales; and the rest is generated from financial
3 and after-sales (Godlevskaja et al., 2011). However, in Brazil, for the entrance cars, branded
dealerships have a weak market position in comparison with non-branded car maintenance
providers since branded dealerships retain only 25 percent of customers after the warranty
time is expired. It should be considered that branded dealerships have the opportunity to
demonstrate their value offering their products during the warranty time. Customers
perceive that non-branded providers offer a lower price for the same service and have more
confidence in the mechanical expertise (Brito et al., 2007).

2.2 After-sales: roles

After-sales could be understood like a set of roles: product support, manifestation of the brand
and customer’s relationship. Product support includes warranties, and it is cash generator
through repair services, selling spare parts and accessories (Ahmad and Butt, 2012). Such
after-sales activities could generate feedback information about the products performance
although some car dealerships in Taiwan perceive this process like a command from the
manufacturers and not a participative process of exchange information (Lai, 2007).
Warranty length is defined by the car producer and its goal is to be responsive and cost
efficient (Kurata and Nam, 2010). Warranty efficiency must be done based on the minimum
waste expense or unnecessary effort and for that companies must establish a standard and
repeatable method to execute the repairs and to collect and analyze data and interpreting
results (González-Prida and Crespo Márquez, 2012).
In order to maintain the warranty validity, car owners must provide the scheduled repairs
during the warranty time following the warranty conditions (Lee et al., 2016). Considering the
dealerships’ point of view, repair services face severe challenges due to technology changes
(Edvardsson et al., 2010), especially in emerging markets where more complex systems have
been introduced rapidly (e.g. automatic transmission) (Izogo and Ogba, 2015). From a
customer’s point of view, while there are benefits associated with a warranty, there are costs to
keep it (e.g. keeping the scheduled repairs according to the warranty conditions). If these costs
are considered high and the warranty time is perceived as short, there is a great impact on
customer’s evaluations and the repeated purchase intention decreases ( Jain et al., 2007).
Spare parts are essential in order perform repair services as well as for the warranty
services. However, they are expensive and the components have high depreciation and
obsolescence costs. It is imperative that manufactures maintain their inventory level at the
central’s and the dealership’s warehouse and at the lowest level possible considering the
balance between service level and inventory holding costs. The lack of spare parts is
frequently associated with the inability to meet customer’s requirements in terms of
performance and effectiveness (Ghodrati et al., 2012).
The second role of after-sales could be related to intangible elements such as reinforcing
the manifestation of the brand since dealerships are a channel exclusively associated with a
brand (Ahmad and Butt, 2012). Brand retention is affected by dealership’s extrinsic aspects
such as product design and performance, warranty, service offering and service prices
established by automotive company, and dealership’s intrinsic aspects related to
competence to do services, store environment and appearance (Verhoef et al., 2007).
Competence to do services is related to employees’ education and training as well
employees’ commitment. Supportive leadership and quality culture feed process
improvement and better service performance comes up (Mosadeghrad, 2014).
 The other intangible element is related to building long-term customer relationship After-sales
(Godlevskaja et al., 2011). Automotive industry has faced increasing customer mobility services
and dealerships, through after-sales services, have the role of building long-term
relationship for sustainable market competitiveness (Godlevskaja et al., 2011). The quality
of relationship could influence customers to purchase their new products, in addition to
improving customer satisfaction, loyalty and company/brand image (Saccani et al., 2006).
The staff efficiency, employees’ ability to listen to customers’ enquiries and react 4
positively to their needs and complaints are essential to establish relationship based on
trustworthiness in automotive repair services (Izogo, 2015). Such aspect reinforces the
customer’s focus as a distinctive competency that may be a source of increased brand
loyalty that leads to greater sales and margins relative to competitors (Elshaer and
Augustyn, 2016).
In such context, it is suggested that companies change their focus from what the product
does to how customers use the product, why, and in what context (Löfberg et al., 2010)
and focus their attention on the short-time transaction and long-term relationship
(Lindgreen et al., 2006). Mitsubishi car drivers in the Netherlands considered relational
aspects more important than the offered service package or price as an aspect in the
consumer’s purchase decision of buying a car (Oderkerken-Schöreder et al., 2003).
A research at Finish automotive companies indicated that dealerships perceive themselves
as a technical expert although need to be customer oriented (Wägar, 2011). Putting in place
customer’s relationship management (CRM) initiatives, managers can identify key aspects
of a specific customer segment considered relevant and increasing service evaluation efforts
useful to drive customers’ loyalty (Nyadzayo and Khajehzadeh, 2016).

2.3 After-sales service, quality management and quality tools

Manufactured cars have adopted quality philosophies and practices such as TQM and
international standards for quality management systems (e.g. ISO and TS standards) over
the past few decades (Punnakitikashem et al., 2010). However, relevant issues still remain
concerning the quality level adopted by new vehicle dealerships. Typically, dealerships
follow quality policies and programs determined by the car companies and their success can
be associated with how they were introduced and implemented (Edvardsson et al., 2010).
A survey performed with Japanese-owned manufactured companies in the USA indicates
that TQM practices significantly influence the overall company. This implies that TQM is
an effective method for improving business performance, regardless of where the
company might be operating, as long as the TQM practices are appropriately implemented
(Miyagawa and Yoshida, 2010).
In automotive industry, basically some factors have been identified as being critical to
the ongoing TQM success: customer’s focus and satisfaction, top management commitment
and leadership, employee involvement, process management (Fraser et al., 2013), strategic
quality planning, supplier management, information system and knowledge, education
(Fotopoulos and Psomas, 2010) and zero-defect (Carmona-Márquez et al., 2016).
In order to support the TQM implementation, dealerships should take into account their
operational capabilities including: service-orientation in corporate culture; human resource
management; organizational structure; service development; IT infrastructure; and
measurement and control systems. Besides such aspects, it is suggested that companies
consider their capacity of maintaining service competitiveness through enhancing,
combining, protecting, and when necessary, reconfiguring the intangible and tangible assets
of the service (Fischer et al., 2010; Werdich, 2015).
Achieving excellence through the best practice associated with service quality, service
space (extrinsic dealership quality), internal marketing and service offering (intrinsic
dealership quality) have been essential to customer’s satisfaction, loyalty and retention
IJQRM behavior (Kauppinen-Räisänen and Grönroos, 2015; Fraser et al., 2013; Verhoef et al., 2007),
35,9 revenue and profitability (Godlevskaja et al., 2011).
In terms of quality tools, it is considered relevant that all areas in a company use these
tools and all employees must be trained in such practices (Bernardino et al., 2016). Besides
the Seven Quality Tools (Pareto analysis, fishbone diagrams stratification, check sheets,
histograms, scatter diagrams and control charts) (Zairi, 2013), 5S and visual management
5 and controls have been mentioned as a set of the most commonly used quality practices.
5S helps to establish the habit of maintaining the procedures (Randhawa and Ahuja, 2017).
Visual management and control make communication simple and attractive, providing
transparency and the identification of deviations from standards, simplifying the
information flow, promoting management based on facts and supporting continuous
improvement (Tezel et al., 2016; Kurczewski and Abdekhodaee, 2016).
The implementation and incorporation of quality practices tools are related to the quality
culture presented at the firms (Gambi et al., 2015). A strong quality culture incentives
follow-up activities promoted by the top management teams. Such follow-up improves
documented action plans and incentive monitoring-based implementation controls using
existing structure (Ford and Evans, 2006).
TQM concepts and quality practices do not measure customer’s satisfaction directly but
they are relevant in developing a visionary leadership structure and organizational culture
which are very important for quality service (Gupta et al., 2005).
In terms of after-sales services, the quality practices tools must induce the improvement
of customers’ satisfaction. Customers’ point of view should be taken in account that
customer experience is a multidimensional construct that involves cognitive, emotional,
behavioral, sensorial and social components (Lemon and Verhoef, 2016). One key element of
understanding and managing customer’s experience is the ability to measure and monitor
customer’s reactions to firm offerings, especially customer’s attitudes and perceptions.
The most usual services dimensions consider to evaluate the service quality according to the
customers’ point of view are tangible aspects, empathy of frontline people, responsiveness,
reliability and assurance (Ooi et al., 2011). Understanding customers’ experience and their
journey over time should consider CRM as umbrella, since the purpose is to establish
appropriate relationship with customers (Lemon and Verhoef, 2016).

2.4 Theoretical framework

For the context of this research, the main after-sales roles are product support, brand
manifestation and customer’s relationship. Figure 1 represents these roles (constructs) and their
elements as well the relationship with quality management. To increase revenue and
customer’s satisfaction with product support, doing more with minimal wastes and efforts is
necessary (Kurata and Nam, 2010; González-Prida and Crespo Márquez, 2012) as well
providing repair services. Spare parts must be available but not obsolete (Edvardsson et al.,
2010; Izogo and Ogba, 2015). Each warranty service should be understood as an opportunity to
improve products and services. However, a good relationship between the costs to maintain the
warranty and its period must be perceived by customers ( Jain et al., 2007).
Brand manifestation is strongly affected by the dealerships’ competence to perform
services (Verhoef et al., 2007). It depends on employees’ education and training as well
employees’ commitment supported by leadership and quality culture (Mosadeghrad, 2014).
Customer’s relationship and its quality could influence customers’ loyalty (Godlevskaja
et al., 2011; Saccani et al., 2006).
For each construct, it is clear that the staff efficiency is crucial and reinforced by the
customer’s focus, top management commitment, employees’ involvement, process
management and information system (Edvardsson et al., 2010; Miyagawa and Yoshida,
2010; Fraser et al., 2013). These quality management principles, supported by quality tools
 After-sales constructs and elements Quality management practices to
After-sales
support after-sales services

Warranty Quality management:

Product Repair services Customer’s focus;
support Feedback about products to the
6
Top management commitment;
car company Employees’ involvement;
Process management;
Information system
Service prices
Brand Competence to perform services
Manifes-
tation Shop environment and Quality tools:
appearance Basic tools (Seven tools);
Visual management;
5S;
Action plan;
Customer’s Staff’s Efficiency Auditing and controlling;
relation-
ship Listen to the customers Customers’ satisfaction
monitoring

Expected impacts:
Customers’ satisfaction Figure 1.
Revenue Theoretical framework

(Zairi, 2013), could reinforce the continuous improvement cycle (Bernardino et al., 2016)
eliminating wastes, improving processes, making them more transparent and promoting
improvement actions (Tezel et al., 2016; Kurczewski and Abdekhodaee, 2016). It is expected
that such basis reflects on customer’s satisfaction as well as revenue.

3. Methodology
This research aims to answer “How do branded car dealerships with the best after-sales
performance in terms of customer satisfaction and revenue per serviced car achieve such
results?” To analyze the quality management practices adopted by dealerships with the best
after-sales performance, a qualitative research approach based on multiple case study was
adopted (Yin, 2014). The current research on the identification of after-sales quality
management practices performed by car dealerships with better performance is suitable to
generate a deep and detailed understanding of this real-life business phenomenon. Such
empirical aspect summed up with the possibility to support theory building (Eisenhardt and
Graebner, 2007) is characteristic of an exploratory research.
By using multiple case studies, first, the performance indicators used by the dealerships
to evaluate customer’s satisfaction and revenue as well dealership quality were identified
and compared. Second, operational indicators and operational practices related to after-sales
offering were identified. Afterwards, comparative analyses were performed to identify
IJQRM dealerships with the best performance. Finally, quality management practices that support
35,9 the achievement of the best results were identified. These steps provide a more
comprehensive view on the what, how and why some practices are being applied in a broad
and more generalizable context (Yin, 2014). Figure 2 presents the steps of this research and
the after-sales constructs and elements considered to achieve the main purpose.

3.1 Cases selection

7 Nine dealerships that represent leader brands were analyzed considering the constructs
presented on the conceptual framework (Figure 1). This study is delimited to analyze data
and practices related to after-sales services from entrance segment car produced in Brazil
(the simplest and cheapest car commercialized by these dealerships). The entrance cars
brands, commercialized by the nine studied brands, represented 85.2 percent of the entrance
car market share in Brazil in 2015.
Table I provides an overview of the entrance cars, car maker/brand and dealerships’
characteristics.

3.2 Data collection

This study data collection occurred in 2015 and 2016. A total of 11 managers were personally
interviewed. Each director or car dealership owner indicated who should be interviewed
(Table II). The interviews had about 2 h on average, and occurred at the dealerships stores.

After-sales constructs and elements Research purposes

Warranty
1. What is the performance of each
Product Repair services
support dealership related to quality and revenue?
Feedback about products to the
Which are the indicators associated to each
car company construct and their results?

Service prices
Brand Competence to do services
manifes- 2. How has each after-sales element been
tation Shop environment and executed by the dealerships?
appearance

3. What quality management practices have

Customer’s Staff Efficiency
relation-
been emphasized by dealerships with better
ship Listen to customers performance?

How do branded car dealerships with the best

after-sales performance in terms of customer
Figure 2.
Purpose of satisfaction and revenue per serviced car
the research achieve such results?
 EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3
Origin Europe Europe Europe Europe USA USA Asia Asia Asia

Entrance car 8,543.00 8,857.00 9,622.00 12,584.00 8,543.00 11,400.00 11,025.00 11,682.00 10,854.00
sales price in US
dollars (Exame
Magazine, 2015)
Characteristics Brake ABS ABS break; ABS ABS brake; 02 No ABS brake with ABS brake ABS brake ABS brake with EDB
of the entrance (anti-lock ESS (signal brake; 02 airbags; power accessories; EDB (electronic with EDB; with EDB; and BAS (brake assist
car and braking of emergency airbags; steering; 1,000cc brake distribution); power power system); power steering;
accessories system); 01 braking); 02 power onboard power steering; 02 steering; 02 steering; 02 automatic air
included in the airbag; airbags; steering; computer, airbags; my airbags; my airbags power conditioning; CD player/
base price 1,000cc 1,000cc power bluetooth radio; connection; connection; assisted bluetooth; reverse
windows; air conditioning system; 1,000cc system; steering camera; 1,000cc
1,000cc 1,500cc 1,000cc 1,000cc
% of the market 14.7 14.7 7.5 2.1 17.7 12.3 8.0 6.1 2.1
share of the
entrance car
(2015)
Number of 4 4 8 2 6 8 4 6 2
dealer stores in
the state
Warranty 36 36 36 36 12 36 72 36 36
(months)
entrance car
services

Characteristics of
After-sales

Table I.
8

dealerships
entrance car and the
IJQRM Experience time in
35,9 Dealership Interviewed Formal studies automotive dealership

EU1 After-sales manager Mechanical technician 20 years

EU2 Service manager Mechanical technician 15 years
EU3 After-sales manager Graduation in business administration 9 years
EU4 After-sales manager Graduation in accountability 15 years
9 AM1 After-sales manager Graduation in business administration 20 years
AM2 After-sales manager Graduation in business administration 20 years
Parts and components manager Graduation in business administration 25 years
AS1 After-sales manager Graduation in business administration 20 years
General manager Mechanical technician 15 years
Table II. AS2 After-sales manager Graduation in business administration 15 years
Interviewed AS3 Commercial manager Master degree in business 26 years
characteristics administration

All the interviews were recorded and transcribed. The interviews were semi-structured and
based on the constructs and purposes shown in Figure 2. All dealerships presented the
performance indicators related to revenue, customer’s satisfaction and dealership quality
(according to car manufacturer) as well operational indicators related to each construct.
Only common indicators adopted by all studied dealerships and calculated with similar
structure were considered. One pilot study was conducted at dealership AM2. One researcher
has larger experience as car dealership consultant. Such aspect facilitates the access to the
shop floor and the communication with the respondents.

3.3 Data analysis

The data initial analysis took into account the dealerships’ performance regarding each of the
indicators affections in favor of the constructs studied. The strategic indicators, related to
customer’s satisfaction, revenue and the automaker satisfaction with the dealership, are
presented in tables and graphs that allow the visualization of comparative performance of
each dealership. In the sequence, the operational indicators for each construct are also
analyzed. From the information and data obtained from the interviews and visits to
dealerships, the quality management practices relative to each construct were also described.
To identify the dealerships with the best performance, it was assigned to each indicator
analyzed a score of three points (***) to the dealership with the best result, two points (**) to
the dealership with the second best result and one point (*) for the third best result. In the
end, the points assigned to each dealership were added and those which had more points
were considered to be those that have demonstrated the best overall performance.
The classification is qualitative and does not propose to quantify performance and follows
standard used in Battaglia et al. (2015).
In possession of the practices adopted by dealerships and the performance identification
of the same, it was possible to analyze what the dealerships with better performance do
regarding quality management practices, how and why they perform and implement these
practices. The interviewees associated the main contribution of the practices mentioned
with customer satisfaction and revenue.

4. Findings and results

4.1 Findings and results regarding customer satisfaction and revenue
In the sequence, the results and indicators regarding quality and revenue are exhibited.
The dealerships did not present the targets assigned to each indicator.
 From the automakers perspective, the indicator “automaker satisfaction index with the After-sales
dealer” expresses the dealership ability to comply with the requirements imposed by the services
automakers. This is not specific to the entrance vehicle.
From the customer perspective, the indicator “Do it right the first time” is what directly
reflects the quality of the technical services performed. This indicator shows the percentage
of customers who did not complain or did not return to the dealership to have the support
products services done again as warranty, scheduled maintenance, maintenance and 10
unscheduled repairs. The indicator “serviced cars without complaints by service” expresses
the percentage of customers served that did not complain about the service.
From the dealerships perspective, the indicator “Average revenue” expresses the ability
to generate revenue for the company. The average revenue considers the revenue per
serviced car at the dealership for the service execution. For this analysis, this indicator is
presented in terms of the percentage value in relation to the price of the new vehicle.
The indicator “price of scheduled maintenance/car price” (in percent) indicates the value of
the first six planned inspections maintenance to be carried out during the vehicle warranty
period. This price is established by the automakers.
Table III exhibits the indicators mentioned.
The dealerships AS1, AS2 and AS3 ( from Asiatic automaker) had smaller values for the
programmed maintenances comparing to the vehicle sale price. In addition, they obtain
the greatest average revenue per service in relation to the vehicle price. Figure 3 shows
comparatively these aspects.
Regarding the technical quality, the best performances are observed in EU2, AS1, AS2
and AS3 (Figure 4) by means of the indicator “do it right the first time.” Whereas when it
comes to service quality, expressed by the indicator “serviced cars without complaint,” the
dealers AS1, EU4 and EU3 had the best performances.

4.2 Operational indicators and quality management practices

4.2.1 Product support. It was observed that all dealerships make use of a similar set of data
and indicators to monitor the performance of practices related to product support.
The indicator “Parts and components available per serviced car” represents the percentage of
vehicles which were serviced without having to wait for the arrival of parts or components in
the dealership. The indicators “warranty chargeback” and “obsolete items in stock” directly
affect the financial-economic result of the dealership. Warranty chargeback reflects
the percentage of services performed by the dealership and not paid by the automaker.

Indicators EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3 Desirable

Quality
Automakers satisfaction index with the 94.0 92.9 92.0 92.0 89.9 70.0 92.0 96.0 95.0 ⇑
dealership (%) – general
Do right at the first time (%) –entrance 80.0 100.0 95.0 95.0 89.0 77.5 98.0 96.0 99.9 ⇑
car
Services performed without complaint 94.3 97.8 99.0 99.2 97.1 98.0 99.2 97.1 95.0 ⇑
(%)
Price and revenue
Price programmed maintenance 9.9 7.4 7.8 8.5 10.5 8.9 5.9 5.0 4.9 ⇓
inspections/car price (%) Table III.
Average revenue by serviced car/car 1.0 1.4 0.7 1.3 1.6 0.5 1.6 1.6 2.9 ⇑ Performance
price (%) indicators
Average revenue by serviced car/ 58.1 116.8 57.3 88.8 91.4 34.4 157.3 190.1 356.0 ⇑ concerning the
maintenance inspection price (%) quality and revenue
IJQRM 12

35,9 11

Value programmed maintenance

AM1
10 EU1

inspection/car price (%)

9 AM2
EU4
8 EU3
EU2
7
11 6 AS1
5 AS2 AS3
4
3
2
1
Figure 3. 0
0 0.5 1 1.5 2 2.5 3 3.5
Economic indicators
Average revenue per serviced car/car price (%)

Quality Indicators
100
90
80 The higher
70 the better
60
50
40
30
20
Figure 4. 10
Indicators of 0
dealerships quality EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3
Do it right the first time (%) Serviced car without complaints (%)

This occurs when the automaker understands that certain services performed under warranty
could not have been granted by the dealerships. Obsolete items in stock indicate the
percentage (in monetary values) of stock which is obsolete.
Table IV exhibits data and indicators provided by dealerships for the year 2015.
Analyzing the post-sale operation regarding technical aspects (assertiveness in complying
with warranties; stock management of parts and accessories), it is observed that EU2, AS1, AS2
and AS3 have better performances. Figure 5 exhibits indicators concerning technical aspects.

EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3 Desirable

Warranty
Warranty chargeback (%) 4.0 0.1 2.0 2.0 0.0 1.0 1.0 1.0 0.5 ⇓
Stock
Table IV. Services not performed due to lack of parts 10.0 10.0 2.0 7.5 8.0 8.0 0.2 1.0 5.0 ⇓
Indicators regarding (%)
product support Percentage of stock obsolete (%) 15.0 2.0 4.0 1.5 4.5 5.0 5.0 5.0 0.5 ⇓
The highest average revenue, despite of lower values of programmed maintenance After-sales
inspections packages, occurs in AS1, AS2 and AS3. These dealerships, unlike the others, services
while the attendant (technical adviser) receives the client scheduled for the programmed
maintenance inspections, the car is inspected and prepared by a technical team to the
entrance into the garage. During this process, the technical team suggests to the
consultant other services that may be offered to the customer beyond the initial purpose of
his going to the dealership. The consultant, in possession of these suggestions, offers 12
these services (typically organized in combos) to customers and already obtain their
authorization for the execution of the same. Also, at this moment, it is already revised the
vehicle delivery time. The emphasis of the consultant is commercial and the whole team is
prepared to identify opportunities to offer additional services. In the dealership AM1, the
customer is received by a mechanic; this leads vehicles the garage satisfying only the
customers’ demands with basically a technical emphasis and not commercial. In AM2,
EU1, EU2, EU3 and EU4 the customer is received by a consultant who, after registration,
sends the vehicle to the garage.
The scheduling of programmed maintenance and warranties services in AM1, AS1, AS2
and AS3 is done considering the mechanics capacity. In the other dealerships, the schedule
considers the availability of technical consultants. This practice makes in the first hours in
the morning (time preferred by customers) the consultants be overloaded and the mechanics
may present some idleness. Due to the consultants’ overloaded agenda at rush hours, the
same focuses on receiving the customer and the car, not spending time offering additional
services such as occurs in AS1, AS2 and AS3. In the Asiatic dealership brands there is a
pace of customers’ arrival more distributed along the day. In these dealerships, when the
service is scheduled, the customer already knows the time estimated for the execution of
the same. Due to this fact, for faster services, many clients prefer to wait in the dealership
the execution of same.
Regarding the warranty chargeback, the worst indices are observed in EU1, EU3 and
EU4. The dealerships AM1, AM2, EU1 and EU2 can offer business bonuses using values
granted by automakers for this purpose. In this case, some services performed as warranty,
but not considered as having merit by the automaker would be subtracted from this value
assigned to commercial bonus. Such practice may indicate that the indicator “Warranty
chargeback,” for these dealerships, can be greater than the one expressed in Table IV due to
the fact that some warranties that would be reversed for the dealership are absorbed as
commercial bonus. The dealerships EU3 and EU4 offer business bonuses granted by
automakers according to the type of component and the life expectancy of the same.
The dealerships AS1, AS2 and AS3 do not receive from the automakers any bonus or value

Technical Performance
16
14 The lower
the better
12
10
8
6
4 Figure 5.
2
Indicators regarding
the technical
0 performance in
EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3
product support
Lack of parts (%) Obsolete (%) Warranty chargeback (%)
IJQRM that can be used as a courtesy or remuneration for any warranty service that could be
35,9 granted without later acceptance from the automaker (case of chargeback).
All dealerships have a specific professional to control and manage the warranty process,
aiming at minimizing the warranty chargeback. In AM1, the warranty services are executed
by the most experienced mechanic of the team to minimize the warranties chargeback and
streamline the relevance analysis or not of the warranty. The dealerships AS1, AS3 and EU2
13 have a specific technician for pre-service to the client requesting warranty. The same
perform test drive with the client verifying what is being requested, confirm with the
automaker if there is a warranty for the demand, monitor the services implementation, carry
out post-service tests. The interviewees AS1, AS2 and AS3 stressed that good management
of warranty services impacts the indicator “Do it right the first time.” These dealerships
analyze weekly, in meetings with the consultants and mechanics, all cases of warranty
services. In other dealerships, customers who request services under warranty are attended
by the services consultant and/or mechanic that fulfill all the demands of schedules (repairs,
fast services and warranties). Therefore, there is a specific focus on customer service that
requests warranty service. EU1 has the highest warranty chargeback index and, according
to the interviewee, the company presents high turnover of technical staff (mechanics, garage
leaders and consultants). Due to this fact, there are frequent wrong diagnosis, which affects
the financial health of the dealer and the indicator “Do right first time.”
The dealerships AS1, AS2,and AS3, with the highest average revenue, also have high
levels of availability of parts which positively affects the customers’ satisfaction and the
ability to offer and perform services at the time they are requested. Inventory management
impacts on the indicators “Parts Availability” and “percentage of obsolete items in stock”
and presents different approaches among the studied dealers.
In the classification ABC of parts in stock, at all dealers, parts A acquired following
purchases pattern and stock level defined by automakers. In the dealerships AS1, AS2 and
AS3, in case of lack of parts or accessories (B and C of the classification ABC), the request is
made by the consultant or the garage leader and reviewed jointly by the services manager
and by the leader kaizen. Being request justifiable, the parts manager is responsible for
forwarding the request to the automaker. The application is also associated with the
customer/vehicle so that the same can be contacted when the parts arrive. This procedure
reduces the number of obsolete items because it is only authorized essential purchases and
which are associated to any maintenance that has already been requested by a customer.
In AM1, AM2, EU2, EU3 and EU4, for parts B and C, the leader mechanic or the garage head
flags the need for parts to the Parts Manager. The Parts Manager, considering it necessary,
makes the request for the automaker. There is no association of the request for parts with
the vehicle or customer to which is being requested. Therefore, it is not always that the
customer is warned on the arrival of parts or is done pre-scheduling of service. Due to such
situation, a lot of parts are always in stock and possibly the customer looked for another
service provider. The worst performance in terms of percentage of obsolete inventory is the
EU1 (also with the worst index of warranty chargeback) where the acquisition of parts is
required by the mechanic without necessarily having a specific demand and acquired by
the Parts Manager. In dealership AS1, if the customer cannot be attended due to lack of
parts, he or she is advised to immediately contact the parts manager so that urgent actions
can be taken.
For the stock management and adequate availability of spare parts, the dealerships AS1,
AS2 and AS3 receive support from business consultants of the respective automakers
and/or distribution center. They work together with the parts and accessories managers,
analyzing the parts internal requests (made by garage consultants or leaders) and verifying
the purchase orders according to purchase of parts established by the automakers.
The other dealerships (AM1, AM2, EU1, EU2, EU3 and EU4) also receive support from After-sales
automaker consultant concerning the stock management and availability of parts and services
accessories. However, unlike what happens in AS1, AS2 and AS3, this consultant is not
exclusively focused on supporting the stock management and also acts in support to other
activities regarding the dealerships management.
Regarding the indicator “Do right the first time,” it is noted that EU2, AS1, AS2 and AS3
have the best results. In EU2 and AS3 all vehicles are checked and tested before being 14
released to the clients. In the dealerships AS1, AS2 and AS3, if the client flags any problems
with vehicle noises, the consultant contacts the mechanic who will repair it and, preferably
with the customer together, will go for a drive with the vehicle and identify exactly the noise
mentioned by the customer. This is because the main customer’s complaint source is the
noise non-elimination.
4.2.2 Manifestation of brand. Service prices are defined by car companies. The dealerships
AS1, AS2 and AS3 have the lowest prices for the programmed maintenances (Table III).
The dealer’s services provision follows guidelines from the automakers. In addition to the
programmed maintenance inspections, maintenances and repairs, there is the offer of organized
services in combos or packages which generally include changing oil and filters, windshield
wipers, revision of air conditioning. EU1, EU2, EU3, EU4, AM1 and AM2 offer customers bring
and take service and vehicle washing as a bonus. AS1, AS2 and AS3 do not offer bring and
take service and the vehicle washing is charged additionally.
Concerning the environment organization of the stores and garages, all of them follow
the standards set by automakers. The dealerships AS1, AS2, AS3 and EU2 have
management panels at sight with exposure of the indicators of each area in addition to the
garages scheduling and customers’ schedules. AM1, AM2, EU1, EU3 and EU4 use LCD
screens to display the schedules and services programming. In AS1, AS2 and AS3, the
garages tools are identified and organized in carts or in own rooms. The use of the same
requires a mechanic card.
Regarding the training of human resources, all automakers provide training for the
dealerships employees, either at the automaker in person as well as e-learning. Table V
exhibits indicators regarding training and turnover. The dealerships EU1, EU2, EU3, EU4
and AM1 provide to some employees’ training in loco and these should disseminate to
others what they have learned. The dealerships AS1, AS2, AS3 also adopt these practices,
but in AS1 and AS2 the number of hours of training is higher than that observed in other
dealerships (Table V ). Still in AS1, AS2, AS3 the new employees do not begin their activities
until they have finished the training provided. Likewise, for the allocation of employees in
other positions. In these dealerships it is also done the practical training verification either
for client service, for technical services performance or administrative.
In addition, the competence to perform properly the services is mapped out by the
management practices of dealerships and the relationship of the automakers with them.
Monthly, all dealerships send reports with information and indicators for the automakers.

EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3 Desirable

HR
Training hours/employee (1st year) 30 30 40 40 30 24 80 210 40 ⇑
Car entrance Table V.
Employee turnover (%) (a) 3 1.2 2 1 4 2.7 0.5 0.5 1 ⇓ Indicators
Dealership general regarding staff
Notes: aThe general turnover in 2015 – considering all the dealership employees; not restricted to entrance vehicle training and turnover
IJQRM Likewise, they also receive reports from automakers with the results of customer
35,9 satisfaction surveys and should organize corrective actions when goals are not fulfilled or
when there are trends of performance worsening.
It is observed the difference in approach: dealerships AS1, AS2, AS3 with performance
more focused on continuous improvement and problems resolution as fast as possible, with
weekly meetings (sectors with leader) and monthly (general); dealers EU1, EU2, EU3, EU4,
15 AM1 and AM2 with more corrective action since that the indicators are submitted monthly
to the group to then corrective actions be established. Such practices arise from the
automakers approaches. The Asian automakers impose on dealerships a pattern and
frequency for continuous improvement meetings; the automaker and the holder (or director)
of the dealership also receive reports on the meetings as well as the indicators and check
various check points; automakers audit the implementation of the corrective and
improvement actions. For the dealerships EU1, EU2, EU3, EU4, AM1 and AM2, the
automakers define the indicators. The pattern and frequency of monitoring and analysis of
performance and definition of corrective actions are not systematized and each dealership
establishes their own way of acting. The respondents from AS1, AS2 and AS3 mentioned to
have constant support from automakers regional advisers. The same regularly visit the
dealerships for analysis of indicators and propose actions to achieve the goals.
In operational terms, in dealerships AS1, AS2, AS3 the leaders from each area (kaizen
leaders) daily identify and monitor the processes that are under their responsibility (gemba),
obtaining information on deviations and problems, making internal benchmarking,
conducting monitoring and employees training. Such practice was not reported or observed
in other dealerships.
In terms of hierarchical structure, it is verified that AS1, AS2, AS3 and AM2 have
structures with less hierarchical levels than the others. These dealerships have a general
manager (or director) and two executives. In these dealerships, the mechanics staff is
established on the basis of demand and these dealerships abdicate of customer service
professionals such as receptionists present in other dealerships. In EU1, EU2, EU3, EU4 and
AM1 it is observed the presence of the director and sales of new vehicles manager, semi-new
vehicles sales manager, administrative manager and finance manager, after-sales manager,
parts and accessories manager.
4.2.3 Relationship. Dealerships consider relevant the practice of active schedule. This is
the scheduling, directed by the dealership. This initiates the contact with the customer and
proposes dates for the maintenance services completion. The indicator considered in this
case refers to “the effectiveness of scheduling,” i.e. the relationship between the total of
customers contacted in relation to the total number of customers who confirmed scheduling
(in percent). The higher the result, the better the process performance.
The schedules effective management is essential for a good garage programming.
Therefore, it is desirable the lowest possible number of customers passing by the
dealerships without scheduling. The indicator considered, in this case, is “scheduled
costumers concerning the total number of customers served” (in percent). The higher the
result, the better the process performance.
To monitor customers’ satisfaction with the services, including technical aspects of
maintenances and services, and capture complaints not formalized until the time of the
vehicle delivery, all dealerships perform satisfaction surveys. The surveys are performed
between three and seven days after the services execution. The dealerships EU1, EU2, EU3,
EU4, AS1, AS2, AS3 aim at contacting by telephone, 100 percent of the customers to
perform the survey. AM2 contacts by telephone only customers who will also be contacted
by the automaker later to evaluate the dealership service (approximately 10 percent of
customers). The dealership AM1 contacts only customers who performed services
associated with the warranty. In addition to the surveys by telephone, EU1, EU2, EU3, EU4, After-sales
AM1, and AM2 offer a questionnaire to assess the customer close to the point of payment services
(cashier) for customers to express their evaluation and suggestions. The filling out of the
questionnaire is voluntary.
Table VI and Figure 6 illustrate the result of these indicators for the year 2015.
The dealerships AS1, AS2 and AS3 organize a proposal of maintenance inspection
schedules scheduled for the client when he or she buys a new vehicle. In the same way, 16
at the end of a programmed maintenance, the next maintenance inspection is already
pre-scheduled and is later confirmed by the help desk. In the other dealerships, such
practices were not observed and the schedule is done through help desk or from electronic
messages sent to the customers. All the automakers provide the dealerships software to
manage schedules. All dealerships send messages to the customers’ cell phones as a
reminder. AM1 uses smartphones applications through which the schedule can be
confirmed by the customer or requested by the same. AM2 makes use of a global platform
structured by the automaker.

4.3 Comparative performance among the dealerships

Table VII exhibits the performance attributed to each dealership for the indicators analyzed,
following what was explained in Section 3.3. Table VIII summarizes the practices observed
in dealerships with the best performance and indicates the priority contribution of the same
to revenue and/or customers’ satisfaction.

5. Discussion and implications

This research evidences the critical role of culture in quality implementation process and
also demonstrated a path of how dealerships achieve customers’ satisfaction and revenue.

EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3 Desirable
Table VI.
Clients contacted by dealership after 100 100 100 100 ~10 ~10 100 100 100 Indicators concerning
service for satisfaction research (%) the relationship and
Effectiveness of the schedule (%) 53 67 42 28 48 63 90 69 50 ⇑ listening to the
Scheduled/total serviced 77 80 63 73 80 76 90 96 71 ⇑ customer

The
higher the
better

100
90
80
70
60
50
40
30
20
10
0 Figure 6.
EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3
Scheduling
Scheduling effectiveness (%) Scheduled/total serviced (%)
IJQRM Construct Indicators EU1 EU2 EU3 EU4 AM1 AM2 AS1 AS2 AS3
35,9
Strategic
External indicator Automaker satisfaction * *** **
quality
Quality (Internal Do right the first time *** ** *
indicators) Complaints services/serviced car ** *** * ***
17 Revenue Average revenue/car price * ** ** ** ***
Best results quality 3rd 1st 2nd 3rd
and revenue
Operational
Product support Warranty chargeback (AM1 and ** *** *
EU2 have bonuses from the
automaker)
Services not performed due to * *** **
lack of parts
Obsolete stock * ** ** ***
Manifestation of Hours training/year(1st year) * * ** *** *
the brand Turnover * * ** *** *** **
Relationship Contacted for satisfaction *** *** *** *** *** *** ***
research/total serviced
Effectiveness of scheduling * *** **
regarding the contacted person
Performed with scheduling/total * * ** ***
Table VII. services
Dealerships Better operational 3rd 1st 1st 2nd
performance by results
analyzed performance Best performance – 4th 1st 2nd 3rd
indicator general

The findings of this research enrich the theory related to quality management explaining
why and how some dealers achieve better performance than the competitors. All studied
dealerships are linked to automotive companies that have been investing for a long time in
Q5 quality standards and practices but even that some dealerships have quality performance
questioned. Such aspect was early mentioned by Fraser et al. (2013) and reinforces that TQM
practices and its relationship with the performance of service need for a deeper investigation
(Psomas and Jacas, 2016).
The analysis of the findings of this research indicates that the dealerships with better
performance in terms of customer satisfaction and revenue are: more standardized
concerning the relationship between automaker and dealerships and the definition of
after-sales services scope and automaker policies are more applied; greater emphasis on
customer service; focused on operational capabilities that support the quality management
practices; focused on core business (product support, brand manifestation and relationship)
with reduced supply of additional services and bonuses.
Q6 Regarding the automaker and dealership and the relationship product with the policy and
definition of after-sales services, the three dealerships representing Asian automakers
(AS1, AS2, AS3) have the best results in terms of customer satisfaction and revenue.
In addition, if the product supports the provision of longer warranties, the client will tend to
make the programmed maintenances for more time in the dealership aiming not to lose his or
her vehicle warranty. This aspect reinforces the relationship between post-sales and product
and impacts the revenue of dealerships. Regarding the relation of the automakers with the
dealerships, the Asian automakers do not grant business bonuses to the dealerships use to
cover warranties not approved by automakers. Such aspect promotes greater rigor and care
 Practices of dealerships Contribution
After-sales
with better performance customer Contribution services
Construct (AS1, AS2, AS3) Performance impact satisfaction revenue

Product Identifies opportunities to offer Tasks performed in parallel X

support additional services (consultant and mechanic)
increase productivity;
business focus 18
Scheduling of customers Flow more uniform of X
consider availability of arrival of customers;
mechanics and the ability of the reduces idleness of
garage mechanics at the beginning
and end of working hours
Fast services, often not The total time for the X
scheduled, are executed in customer service faster;
specific boxes where two customers when waiting
mechanics operate are directed to the store
simultaneously where there is presence of
releases and new cars
Automakers do not grant Rigor in the granting of X X
business bonuses to be used in warranties as errors is
the rebates of warranties covered by dealerships
granted; customer requesting (without business bonuses
warranty is serviced by specific on the part of the
technician; every week there are automakers)
meetings with consultants and
leaders of the garage to analyze
all warranty orders
All cars are checked and tested Focus on technical quality X X
before being released to
customers (only in AS3);
problems of noise are verified in
test drive with the customer
Purchase of parts B and C, when Rigor in applications to X X
in lack to perform the repair, it is prevent items still in stock
requested by the consultant or and obsolete; work fast in
leader; request for missing parts order not to lose the client
is associated to the customer and due to lack of parts; best
car; when available, customer is performances in indicators
contacted to schedule service; relating to inventory;
support from consultant to the decreases quantity of
company or distributor focused customers not served by
exclusively in the management lack of parts and increases
of inventory, analysis of margin by less obsolete
ordering, planning of purchases stock
Manifestation Additional services are Business focus on the X
of the brand organized in combos; fewer customer approach;
options of combos increases revenue by
serviced car
It is not available bonuses such Focus on core business X X
as free washing and services of
hitchhiking (bring and take)
Load of training of new staff is Focus on quality (technical X
superior to the other and customer service);
dealerships; employee is only comply with procedures Table VIII.
Summary of best
practices and
(continued ) performance impact
IJQRM Practices of dealerships Contribution
35,9 with better performance customer Contribution
Construct (AS1, AS2, AS3) Performance impact satisfaction revenue

able to perform it after training

and follow-up from the manager
Management panels on sight
19 with schedules, garage
programming, performance
indicators, plans of actions;
carts with tools identified; use
the same upon mechanics’ cards
Weekly meetings in the areas;
immediate establishment of
corrective actions; emphasis on
continuous improvement;
automakers and owners or
dealers’ directors receive weekly
reports; periodic audits by the
automakers; Kaizen leader in the
sector monitors daily his or her
area, performs training and
triggers corrective actions or
improvements whenever
opportunities are observed
Relationship Active scheduling of
programmed maintenances
when the customer buys the
new car and when finishing a
maintenance
Contact 100% of clients served
for them to assess quality of
technical service and customer
service
Table VIII.
Transparency in the X X
results, organization of the
work environment, focus on
continuous improvement
Rigor in the establishment X X
and enforcement of
procedures, either for
monitoring the
performance or for the
establishment of plans of
actions; robust compliance
of operational procedures
with daily monitoring of the
kaizen leader in the sector
Ensure customer flow X
compatible with the
capacity of the garages;
reduce passage of
customers without schedule
Monitor quality of technical X
service and customer
service; act quickly in the
event of dissatisfaction or
problems and forward
actions for improvements

on the part of the dealerships in warranties analysis and management; all warranty claims are
reviewed on a weekly basis as well as the respective indicators.
Regarding the focus on customer service, the dealerships with lower performance on the
indicators examined emphasize the technical expertise not prioritizing the focus on
customer service as noted in Wägar (2011) and Phan et al. (2011). In Asian dealerships there
is the combination of customer service and technical expertise. The focus on the customer
service was observed even in services related to product support (repairs and warranties).
As examples of the practices focused on customer service, in Asian dealerships, it is
mentioned: signals to the customer when there is lack of parts and direct access of the same
to the services manager; order of missing parts associated to the customer and vehicle so
that the customer does not evade to competition; assertive offer of service packages by the
consultant from the identification of opportunities by technical staff; identifying noise
problems with the participation of the client; satisfaction survey with 100 percent of clients
served; efficient active schedule with pre-scheduling when it comes the time of the
acquisition of new vehicle and/or termination of services in the dealership. The focus on
technical expertise was observed by the rigor in the granting of warranties, in the evaluation
of vehicle noise in cars, in the management of inventory of parts and accessories.
 The operational capabilities that support the implementation of TQM pointed out in After-sales
Fischer et al. (2010) and Werdich (2015) are present in all dealerships. All managers services
interviewed confirmed that implementing the quality culture at the dealership level has not
been easy (Fraser et al., 2013). The difficulties do not fall within the scope of the physical
structure or of information systems once that integrated systems with the automakers are
available at all dealerships. The barriers to the implementation of the quality culture focuses
on the organization of processes, the management of people and the emphasis on continuous 20
improvement. The corporative culture based on the definition of detailed operational
procedures and the monitoring of their compliance, mentioned at Edvardsson et al. (2010), is
more present in Asian dealerships. The Asian automakers dealerships are distinguished by
the rigor and discipline, with the improvement of the processes and indicators.
The importance of leadership in the processes of continuous improvement emphasized in
the literature affects the quality management (Elshaer and Augustyn, 2016). Despite of not
being a recent approach, the involvement of the leaders of each sector with their teams is
systematized and incorporated into the culture of the Asian dealerships and less structured
in American and European dealerships. The hierarchical structures are leaner in Asian
dealerships. The Asian automakers impose standard for the implementation and frequency
of continuous improvement meetings, which was not observed in the dealerships of
American and European automakers. On the other hand, the Asian automakers offer
specific technical consultants to assist in the stock management of parts and accessories
and advisers and auditors regularly accompany the indicators and the definition and
implementation of corrective actions. It is reinforced, in this analysis, the role of the
automakers as quality policy makers and assures that the same are fulfilled. This emphasis
is directly related to the manifestation of the brand as a whole: product and service.
This research contributes to the academic literature to demonstrate that where there is less
flexibility and more rigor in terms of organization of actions for improvements and
compliance with the procedures and more support and monitoring by the automaker, the
indicators performance is better.
The dealerships in Asian brands tend to have fewer options for additional packages of
services but they obtain more revenue per vehicle. They are more assertive in offering these
additional services. It is observed that simultaneous implementation of commercial services
and identification of opportunities, which was not observed in other dealerships where the
tasks occur sequentially.
It was also observed the presence of bonuses as transportation to the customer to leave
and return to fetch the car and washes in dealerships representatives of brands from Europe
and America. Such aspect is not present in the Asian dealership brands. This aspect, which
was not seen in the literature studied, flags that dealerships of Asian brands have focus on
core business not investing resources for managing complementary offerings that can
generate customer expectations and dissatisfaction.

6. Conclusions
This paper had as a purpose to present the quality management practices that support
the dealerships’ achievement of better results concerning customers’ satisfaction and revenue.
Therefore, strategic and operating performance operators were identified and adopted by nine
dealerships. The management practices used by dealerships were also analyzed regarding
product support, manifestation of brand and relationship. Afterwards, the practices adopted
by dealerships with better performance in identified indicators were discussed.
This research contributes to the academic literature demonstrating the importance of
aspects set out regarding quality management with revenue and customer satisfaction.
Among these aspects it is highlighted the leadership role with their teams, rigor in the
establishment and enforcement of procedures, the focus on continuous improvement.
IJQRM However, aspects not verified in the studied literature were observed in the cases studied,
35,9 among which are mentioned if less availability of additional services combos in dealerships
with greater revenue, lack of bonuses to customers in dealerships with greater
customer satisfaction index, occurrence of activities in parallel such as customer services
and verification of the vehicle streamlining time spend on this activity and improving
effectiveness in selling additional services.
21 The results appointed are subject to the limitations of the research herein. First, the same
was restricted to a geographical region of southern Brazil which covers a radius of 100 km
around the capital of the state. Second, the data and indicators obtained relate mostly to the
results regarding the vehicles. It is considered that after-sales services of more luxurious
vehicles may exhibit distinct operationalization and relationship characteristics with the
customer. Third, the data collection was based on the responses of the dealerships’
representatives not considering the automakers or the customers’ perception. Finally,
performance indicators were presented that were used in databases similar in all dealerships
studied although other results and analysis criteria are used by managers as well.
As opportunities for future research, it is suggested to investigate how the post-sale
practices are related to new sales leverage in the dealerships from various brands.
The analysis of the customers’ evasion looking for services in non-branded garages is also
regarded as an opportunity for research.

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Further reading
ANFAVEA – Associação Nacional de Produtores de Veículos Automotores (Automotive Vehicles
Producers National Association) (2015), “Anfavea revela os resultados da indústria automotiva em
outubro (Anfavea revels the automotive industry results – October/2015)”, available at: www.
anfavea.com.br/docs/06.11.15_PressRelease_Resultados_Outubro2015.pdf (accessed May 2016).
Q4

Corresponding author
Miriam Borchardt can be contacted at: miriamb@unisinos.br

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