New car dealerships play an integral role in the initial and on‐going relationship between the purchaser and vehicle manufacturer. Evidence, mostly anecdotal, suggests that the buying and servicing experience of the paying public in regards to new car dealerships is far from ideal. With continuous improvement systems such as total quality management (TQM) firmly embedded into the manufacturing and supply side of the car industry, questions still exist surrounding the level of quality being adopted by automotive dealerships. The purpose of this paper is to empirically investigate if a quality culture is being developed within the dealership network in South Australia by testing a number of key principles of TQM such as: the support and commitment from top management, customer focus and satisfaction, process management, and employee involvement.
A questionnaire survey was designed and all 105 new car dealerships in the greater Adelaide region were targeted. The service manager from each dealership was advised of the pending posted questionnaire and an excellent response rate of 66 percent was achieved.
Results indicated a reasonably high level of commitment to quality within dealerships, including the important success factors of TQM. Questions still remain about quality endorsement, the type of quality systems being used and the depth of penetration of quality at the ground level.
The limiting features of this study surround the descriptive nature of the data analysis and the fact that the study was only conducted in one major city in Australia.
The findings of this paper can give some implications for senior managers to consider when developing firm's policies.
Empirical studies on quality in automotive dealerships are very scarce in the literature. Therefore, this paper provides an insight into the quality culture of new car dealerships and examines if key TQM principles such as top management support, customer focus, process management, and employee involvement are in fact practised.
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