DaimlerChrysler to build service clientele

Automaker wants to raise revenues with maintenance, parts and accessories

Berlin. The DaimlerChrysler sales organization in Germany is launching a sales offensive.

"We put our strategy to the test in fall 2004. We have now developed 20 new approaches and tools that we will implement by the end of 2006," said Hans-Bahne Hansen, the managing director for after sales.

The goal is "to take the top spot in the most important rankings for customer satisfaction," he said.

The company's loyalty rate among owners with cars less than 4 years old is more than 90 percent. "But we are still seeing potential for additional revenues among cars that are older than 4 years," Hansen said.

Cars between 4 and 8 years old make up one-third of the DaimlerChrysler cars on the road in Germany. It consists of about 4 million Mercedes-Benz cars, 250,000 Smart cars and 230,000 Chryslers and Jeeps. Also, there are about 1 million vans and trucks.

The service revenues per vehicle for vans and trucks are higher than revenues for cars.

Last year, DaimlerChrysler's German sales group had after-sales revenue of 2.8 billion euros.

The average age of Mercedes-Benz vehicles serviced by authorized outlets is about 5.5 years. The switch to quick service outlets and independent garages takes place significantly later than the industry average.

"All the same, we want to increase the average age by 2007," Hansen said.

By the end of this year, the sales group wants to introduce an incentive system to encourage owners to bring their cars back to authorized centers for service.

"Mercedes card holders can collect bonus points with each service visit and can exchange them for accessories, services or invitations to exclusive events," Hansen said.

Cooperation with eBay

For several weeks, the sales group has been offering repair financing through the DaimlerChrysler finance arm The organization has recently been offering aggressive package prices to customers who extend their warranty contract up to 10 years. Mercedes-Benz has had the program since May.

"It is running into brisk demand," Hansen said. "We are closing 300 contracts a week."

In mid-September, a similar service contract program begins for Jeep and Chrysler vehicles.

To address price-oriented customers, the sales group has signed an agreement with eBay.

"We aren't going to sell our services at a loss in auctions," Hansen said. "Instead, we are going to set the prices our customers will be most receptive to. In this way, we are giving our service partners the chance to address a new customer group," he said.

The test period begins in September.

The automaker's German service network consists of 1,183 facilities for Mercedes-Benz, 230 for Smart, and 257 for Chrysler and Jeep.

Hansen said, "We aren't going to disturb that structure."