My Geely EV is now five months old and has just hit over 7,000km, and except for a really annoying rattle from the sun visor that creeps down to the dashboard, I have not experienced any issues with the vehicle. I consider myself lucky that my short ownership experience has so far been positive; buying a brand with great products but a tainted after-sales reputation was a big risk for someone like me, who was accustomed to the support offered by legacy brands.
Not so lucky, though, is my nephew Alonso, whose vehicle (not a Geely) has been with the dealership for accident-related repairs for over three months now. The shunt to his SUV was nothing really serious, but repairs have taken this long due to the unavailability of spare parts. And despite a phone call I made to the general manager of the dealership, nobody has been able to give him a timeline as to when the parts will be available.
Alonso’s horror story is one of many that have been personally told to me, shared with me, and posted online by owners desperately asking for help to get their car sorted out. And filtering these stories, I have noticed that a lot of the issues raisedinvolve the many new brands that have entered the Philippine automotive scene in the past decade.
Just 10 years ago, there were approximately 30
Just 10 years ago, there were approximately 30 car brands doing business in the country. Today, there are officially71 and counting! The more than doubling of the number of players in the last decade, in a market that has grown only 20% in the same period, has created intense competition. This has resulted in the customary grand launches, high-profile celebrity endorsers, and never-ending promotions—all geared to push volume and gain market share. With all the focus on sales, I am under the impression that new players give very little effort to the after-sales side of the business, which I believe has led to my nephew Alonso’s situation.
As someone who has extensive experience in new car brand start-ups, I understand that the small number of units in circulation and today’s battery-electric-vehicle-heavy model portfolio will not generate much after-sales business in the first few years, making new car sales a focus area for revenue generation. But brakes in an EV still need to be serviced, software will require updates, and of course accidents can happen, so it would therefore be wise to be prepared for this.
And by prepared I mean investing in a future-proof workshop, conductingproper training for the technical team, and having adequate parts stock supported by an efficient logistics system. And while investing the time and money upfront will not reap instant rewards, launching with a solid after-sales operation will boost consumer confidence in your company and your cars, which will lead to more customers choosing your brand over the others.
Case in point: I was part
Case in point: I was part of the pioneer team that started a premium automotive brand in 2008. I distinctly remember that our new car sales projection was for 200 units in the first year, and the projection for the workshop was for 1 unit per day or25 cars per month. Simply put, this meant that almost all of the revenues in that first year would come from new car sales, and even the service department’s overhead costs would need to be subsidized by the sales department.
Despite this daunting revenue challenge, we did it anyway. We had a cathedral of a workshop with 10 work bays, the technicians were continuously attending training courses, and the parts warehouse was very well stocked from day one with everything from oil filters to bumpers.
Today, that 2008 start-up is one of the most successful brands competing in the premium segment, whose success was built on making sure the customer was taken care of AFTER the sale. And by the way, their after-sales department now receives around 50 cars PER DAY, and generates enough revenue to absorb a significant percentage of the entire company’s overhead expenses.
If an aspiring new car brand wants
If an aspiring new car brand wants to succeed in the Philippines and possibly anywhere else in the world, they should give the same attention to the after-sales business as they do with new car sales. Believe me, I totally understand the pressures of delivering the volume—I’ve been there. But I also believe that the pressure coming from your principals is easier to control (and less damaging) than the pressures brought about by the demands of an irate customer who will at the very least tell his friends about his unpleasant experience.
Könosuke Matsushita, the founder of Panasonic, once said: “After-sales service is more important than assistance before sales. It is through such service that one gets permanent customers.” He understood that effective after-sales service can directly impact brand loyalty and repeat business. Don’t get me wrong here, I am not saying that one department is more important than the other—but customer loyalty increases when the sales and after-sales departments present a united front to customers.
Nothing is worse than a customer getting caught in between the promises of a sales consultant and the standard processes of the after-sales department; denying an item or a service to a customer that was promised by the sales consultant. These include an agreed time of completion, a free software update, or even a simple call to update him or her on the status of their vehicle. The latter of which is the number one issue raised by customers across almost all brands.
Legacy brands seem to get this
Legacy brands seem to get this. Not only do they invest in hardware like workshop equipment, parts inventories, and supply chain logistics, but they also invest heavily in their team members. They provide hours of training not only to impart technical knowledge, but also to develop soft skills like EQ, teamwork, and communication.
Their leaders also create a culture of open communication across the organization to ensure that the company always presents a united front to their customers. Unfortunately, not everyone does. I once asked an importer principal if he had plans of increasing his parts inventory to match his growing number of sold vehicles. I almost fell off my chair when he replied: “Customers of European brands are okay to wait one to two months for parts to arrive, so if I can ship their parts in less time than that, my company is already better than them.” That, my friends, is exactly the mindset you need of how NOT to build your brand.
Let me end with an update on the Geely. Although it has nothing to do with the vehicle itself, I did experience something not so nice—my dealer lost their franchise! The Geely website does list 40 other dealerships nationwide that can support my EX5, but remember that my purchase considerations heavily involved long-term relationships with my dealer.
For now, my car and I are orphans,
So for now, my car and I are orphans, waiting to be adopted by another dealer to handle my service needs. I can only hope that the new Geely dealer that adopts me can take care of me, and that new players in the industry do give more attention to the after-sales side of the business, so owners like Alonso can finally get their car back from the workshop.
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