By Mike Colias, Crain News Service
DETROIT (June 6, 2013) — General Motors Co. will include free maintenance on most 2014 Chevrolet, Buick and GMC models in a bid to increase sales through better customer loyalty, CEO Dan Akerson said June 6.
Buyers will get free oil and filter changes, tire rotations and 27-point inspections for two years or 24,000 miles—whichever comes first. GM recently began offering the same deal on its Chevrolet Silverado and GMC Sierra pickups and already offers a more extensive free-maintenance program for Cadillac.
A GM spokesman said the offer will be good on "virtually all" models sold at retail, with the possible exception of a few low-volume, high-performance cars.
In prepared remarks for a speech at GM's annual shareholders meeting at the company's headquarters in Detroit, Mr. Akerson said the move is intended to "forge even stronger relationships" between GM dealerships and customers and "to kick the ownership experience off on the right foot."
He said customers who have service done at the dealership are more likely to return there for their next purchase.
Free maintenance programs are common for luxury brands, but more non-luxury brands are offering included maintenance as a customer retention move that gets customers in the habit of regularly returning to the auto dealership for service. Toyota and Volkswagen have offered free maintenance across their U.S. lineups for a few years.
Many car dealers say they like the included-maintenance programs because they can use it to close sales and it draws buyers back to their stores as service customers. Some, however, complain that GM doesn't reimburse them for the services as much they charge on their own.
All four GM brands showed above-industry average gains in U.S. owner loyalty during the first quarter, according to figures released by marketing research firm R. L. Polk & Co. on June 5. Cadillac finished second in the report with an 8.3 percentage-point gain over the same quarter last year with 47.4 percent of Cadillac buyers returning to the brand, Polk said.
But Chevrolet, at 56.2 percent, was the only GM brand with a loyalty rate that exceeded the industry average of 51.5 percent. Ford is No. 1 at 65.1 percent, Polk said.
GM has been working with its dealers to improve customer retention through training programs with Walt Disney Co., for example. The company is spending billions of dollars to help about 90 percent of its 4,400 dealerships with extensive facility renovations.
A 1-percentage-point increase in customer loyalty translates into an additional $700 million in revenue for GM, a company spokesman said.
The included maintenance program covers up to four service visits and is transferable to subsequent owners.
This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.