Automobile dealerships may pursue business growth by attempting to increase repurchase loyalty—the return of customers to their current dealership to...
GMAT Reading Comprehension : (RC) Questions
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Automobile dealerships may pursue business growth by attempting to increase repurchase loyalty—the return of customers to their current dealership to purchase their next vehicle. As the quality and functionality of most vehicles approach parity, sales and service increase in importance. Analysis of customer survey data reveals that satisfaction with service accounts for one-third of total customer satisfaction, and is predominantly based on the dealership's ability to repair a vehicle correctly, on time, at the first attempt. Whereas "best in class" performance approaches 90 percent, average dealer performance against this target is only 65 percent—meaning that one in three customers must go back for further repairs. The traditional solution to this performance shortfall has been to establish mandatory training to make repair technicians more effective. But since extra training means that technicians spend less time working, the diagnostic stage of the repair process is often rushed, leading to failure to detect faults and thus defeating the object of training. The problem can be exacerbated by flat-rate compensation that emphasizes number of jobs a technician completes rather than quality of service. In addition, training costs decrease dealers' profits, prompting them to reduce their investment in tools and equipment, further limiting technicians' overall effectiveness.
Ques. 1/3
According to the passage, sales and service have increased in importance for automobile dealerships because many
Solution
1. Passage Analysis:
Progressive Passage Analysis
| Text from Passage | Analysis |
|---|---|
| Automobile dealerships may pursue business growth by attempting to increase repurchase loyalty—the return of customers to their current dealership to purchase their next vehicle. | What it says: Car dealerships want to grow their business by getting customers to come back and buy their next car from the same dealership. What it does: Introduces the main topic and goal - dealership growth through customer retention Source/Type: Factual statement about business strategy Connection to Previous Sentences: Opening sentence - establishes the context Visualization: Dealership A has 1000 customers. Instead of those customers going to Dealerships B, C, or D for their next car, they want all 1000 to return to Dealership A. Reading Strategy Insight: This is a clear, straightforward opening that tells us exactly what the passage will be about. What We Know So Far: Dealerships want repeat customers What We Don't Know Yet: How they achieve this, what the challenges are |
| As the quality and functionality of most vehicles approach parity, sales and service increase in importance. | What it says: Since most cars are now pretty similar in quality and features, how you sell and service cars becomes more important for success. What it does: Explains WHY repurchase loyalty matters more now than before Source/Type: Author's analysis of market conditions Connection to Previous Sentences: This builds on sentence 1 by explaining the market context that makes customer loyalty so crucial. It answers "Why is repurchase loyalty important?" Visualization: 10 years ago: Car A had better features than Cars B and C, so people bought Car A. Today: Cars A, B, and C all have similar quality and features, so customers decide based on how well they're treated by the dealership. Reading Strategy Insight: This sentence helps us understand the business pressure driving the whole discussion What We Know So Far: Dealerships need repeat customers because cars are becoming too similar to compete on product alone What We Don't Know Yet: Specific strategies for building loyalty |
| Analysis of customer survey data reveals that satisfaction with service accounts for one-third of total customer satisfaction, and is predominantly based on the dealership's ability to repair a vehicle correctly, on time, at the first attempt. | What it says: Research shows that 1/3 of customer happiness comes from service, and service satisfaction mainly depends on fixing cars right the first time, on schedule. What it does: Provides specific data to support the previous sentence and narrows focus to repair service Source/Type: Research data from customer surveys Connection to Previous Sentences: This builds on sentence 2 by giving concrete evidence that service matters, and specifically identifies repair quality as the key factor. Visualization: Customer satisfaction = 33% service + 67% other factors (price, car features, etc.). Within that 33% service portion, most depends on: Fix it right + Fix it on time + Fix it in one visit. Reading Strategy Insight: We're getting more specific - from general "service matters" to exact "repair service is what really counts" What We Know So Far: Service is 1/3 of satisfaction, repair quality is the core of service satisfaction What We Don't Know Yet: How well dealerships actually perform at this |
| Whereas "best in class" performance approaches 90 percent, average dealer performance against this target is only 65 percent—meaning that one in three customers must go back for further repairs. | What it says: The best dealerships fix cars correctly on the first try about 90% of the time, but the average dealership only succeeds 65% of the time. This means about 1 out of every 3 customers has to come back for more repairs. What it does: Reveals the performance gap and quantifies the problem Source/Type: Industry performance data Connection to Previous Sentences: This provides the actual performance numbers for the "repair correctly, on time, at first attempt" standard mentioned in sentence 3. Shows there's a significant problem. Visualization: Best Dealerships: 90 out of 100 repair jobs done right the first time. Average Dealerships: 65 out of 100 repair jobs done right the first time (35 customers have to come back). Reading Strategy Insight: This is still building the same point - we now have the exact numbers showing most dealerships are failing at what matters most What We Know So Far: Most dealerships are performing poorly at the key factor for customer satisfaction What We Don't Know Yet: Why this happens and what's being done about it |
| The traditional solution to this performance shortfall has been to establish mandatory training to make repair technicians more effective. | What it says: The usual way dealerships have tried to fix this poor repair performance is by requiring mechanics to take more training. What it does: Introduces the conventional approach to solving the problem Source/Type: Factual description of common industry practice Connection to Previous Sentences: This directly addresses the performance gap identified in sentence 4. It answers "What do dealerships typically do about this 65% vs 90% problem?" Visualization: Problem: 35 out of 100 customers need return visits. Traditional Solution: Send mechanics to training classes to improve their skills. Reading Strategy Insight: We're moving from problem identification to solution attempts. The word "traditional" hints this might not be the best approach. What We Know So Far: Poor repair performance is typically addressed through more technician training What We Don't Know Yet: Whether this training approach actually works |
| But since extra training means that technicians spend less time working, the diagnostic stage of the repair process is often rushed, leading to failure to detect faults and thus defeating the object of training. | What it says: However, when mechanics are in training, they're not working on cars. To make up for lost time, they rush through diagnosing problems, which causes them to miss issues and makes the training pointless. What it does: Reveals why the traditional solution backfires Source/Type: Author's analysis of the unintended consequences Connection to Previous Sentences: This contrasts with sentence 5 by showing that the "traditional solution" actually creates new problems. Training is supposed to help, but it hurts performance instead. Visualization: Mechanic's Day Before Training: 8 hours diagnosing and fixing cars carefully. Mechanic's Day With Training: 2 hours training + 6 hours rushing through diagnosis and repairs = more mistakes than before training. Reading Strategy Insight: The passage is showing us why an obvious solution doesn't work - this is still building the same argument about repair quality problems What We Know So Far: Traditional training approach backfires because it creates time pressure What We Don't Know Yet: What other factors make this worse |
| The problem can be exacerbated by flat-rate compensation that emphasizes number of jobs a technician completes rather than quality of service. | What it says: The rushing problem gets even worse when mechanics are paid based on how many jobs they finish instead of how well they do the work. What it does: Adds another factor that reinforces the same underlying problem Source/Type: Author's analysis of compensation structure impact Connection to Previous Sentences: This builds on sentence 6 by identifying another cause of rushing. Both training time pressure AND pay incentives push mechanics to work fast rather than carefully. Visualization: Mechanic A (paid per job): Rushes through 10 jobs, gets paid for 10, but 4 customers return with problems. Mechanic B (paid for quality): Takes time on 8 jobs, gets them all right the first time. Reading Strategy Insight: Feel relieved here - this isn't a new separate problem, it's just another example of the same rushing/time pressure issue What We Know So Far: Multiple factors (training time loss + pay structure) both encourage rushing and poor diagnosis What We Don't Know Yet: If there are additional reinforcing factors |
| In addition, training costs decrease dealers' profits, prompting them to reduce their investment in tools and equipment, further limiting technicians' overall effectiveness. | What it says: Also, because training costs money and reduces profits, dealers cut spending on tools and equipment, which makes mechanics even less effective. What it does: Completes the critique by showing how training creates a resource constraint that worsens the original problem Source/Type: Author's analysis of the financial cascade effect Connection to Previous Sentences: This is the final piece of the same argument. Sentences 6-8 all explain different ways that the "traditional solution" of training makes the repair quality problem worse instead of better. Visualization: Dealer Budget: $100,000 total. Option A: $15,000 on training + $85,000 on tools = poorly equipped mechanics. Option B: $5,000 on training + $95,000 on tools = better equipped mechanics. Reading Strategy Insight: This completes a unified argument - the passage has thoroughly explained why the obvious solution fails. We now understand the full cycle of how training backfires. What We Know So Far: Training creates time pressure, pay structures reward speed over quality, and training costs force cuts in tools - all making repair quality worse What We Don't Know Yet: This appears to be the complete argument |
2. Passage Summary:
Author's Purpose:
To explain why the traditional approach to fixing poor repair service at car dealerships actually makes the problem worse instead of better.
Summary of Passage Structure:
The author builds their argument by first establishing why repair quality matters, then showing how badly most dealerships perform, and finally explaining why the obvious solution backfires:
- First, the author explains that car dealerships need repeat customers to grow, and since all cars are becoming similar in quality, good service is now the main way to keep customers happy.
- Next, the author uses survey data to show that repair service makes up one-third of customer satisfaction, and then reveals that most dealerships are failing badly at this - only fixing cars right the first time 65% of the time instead of the 90% that top performers achieve.
- Then, the author introduces the standard solution that dealerships use - more training for mechanics - but immediately shows this backfires because mechanics rush through diagnosis to make up for time lost in training.
- Finally, the author piles on two more ways that training makes things worse: pay systems that reward speed over quality, and training costs that force dealerships to cut spending on tools and equipment.
Main Point:
The traditional solution of giving mechanics more training to improve repair quality actually creates a cycle that makes repair performance worse, not better, because it leads to rushed work, misaligned incentives, and reduced resources.
3. Question Analysis:
The question asks us to identify why sales and service have increased in importance for automobile dealerships. This is asking for a cause-and-effect relationship that explains a shift in what matters most for dealership success.
Connecting to Our Passage Analysis:
From our passage analysis, the key insight comes from the second sentence where the author explains the market context. The passage analysis specifically noted: "Since most cars are now pretty similar in quality and features, how you sell and service cars becomes more important for success." This directly addresses why there has been a shift in importance toward sales and service.
The passage analysis also highlighted that this sentence "helps us understand the business pressure driving the whole discussion" - meaning this market change (cars becoming similar) is the fundamental reason behind everything else discussed in the passage.
Prethinking:
The passage clearly states that as cars have become more similar in "quality and functionality," dealerships can no longer compete primarily on product features. This forces them to differentiate through sales and service instead. The answer should reflect this shift from product-based competition to service-based competition due to product parity.
Answer Choices Explained
A
dealers institute growth strategies that produce unforeseen results
Why It's Wrong:
• The passage doesn't discuss unforeseen results from growth strategies
• This confuses the solution (growth strategies) with the cause of why sales/service matter more
• The passage focuses on market conditions (car similarity), not strategy outcomes
Common Student Mistakes:
• The passage doesn't discuss unforeseen results from growth strategies
• This confuses the solution (growth strategies) with the cause of why sales/service matter more
• The passage focuses on market conditions (car similarity), not strategy outcomes
Common Student Mistakes:
- Did you think this was about dealership strategies backfiring?
→ The passage discusses training strategies failing, but the question asks why sales/service became important in the first place - Did you focus on the training problems mentioned later?
→ Those problems explain why dealerships struggle with service, not why service became important
B
dealers are unable to meet the "best in class" target for service and are therefore at a disadvantage
Why It's Wrong:
• This describes a consequence of poor service, not the reason service became important
• The 65% vs 90% performance gap explains current problems, not the underlying market shift
• This puts the cart before the horse - poor performance is a result of service being important, not the cause
Common Student Mistakes:
• This describes a consequence of poor service, not the reason service became important
• The 65% vs 90% performance gap explains current problems, not the underlying market shift
• This puts the cart before the horse - poor performance is a result of service being important, not the cause
Common Student Mistakes:
- Did you focus on the performance statistics mentioned in the passage?
→ Those numbers show how poorly dealerships are doing, but they don't explain why service matters more now - Did you think competitive disadvantage was the root cause?
→ The disadvantage exists because service is important, not the other way around
C
automobiles are comparable in most respects and are therefore equally desirable
Why It's Right:
• Directly matches the passage's explanation that car "quality and functionality" are approaching "parity"
• Shows the logical connection: similar cars → can't compete on product → must compete on service
• Uses "comparable" and "equally desirable" which perfectly captures the "parity" concept
Key Evidence: "As the quality and functionality of most vehicles approach parity, sales and service increase in importance."
• Directly matches the passage's explanation that car "quality and functionality" are approaching "parity"
• Shows the logical connection: similar cars → can't compete on product → must compete on service
• Uses "comparable" and "equally desirable" which perfectly captures the "parity" concept
Key Evidence: "As the quality and functionality of most vehicles approach parity, sales and service increase in importance."
D
present-day automobiles are more complex and difficult to repair than automobiles of the past
Why It's Wrong:
• The passage never mentions cars being more complex or difficult to repair
• This contradicts the passage's focus on cars becoming similar (approaching parity)
• The repair problems discussed stem from dealership practices, not car complexity
Common Student Mistakes:
• The passage never mentions cars being more complex or difficult to repair
• This contradicts the passage's focus on cars becoming similar (approaching parity)
• The repair problems discussed stem from dealership practices, not car complexity
Common Student Mistakes:
- Did you think the repair problems meant cars are harder to fix?
→ The passage shows repair problems come from rushed diagnosis and poor training, not complex cars - Did you assume technological advancement means more complexity?
→ The passage suggests the opposite - cars are becoming more standardized (approaching parity)
E
present-day automobiles function less well than automobiles of the past
Why It's Wrong:
• The passage states cars are approaching parity in "quality and functionality," suggesting they function well
• Nothing in the passage indicates modern cars function poorly
• This completely contradicts the passage's premise about product parity
Common Student Mistakes:
• The passage states cars are approaching parity in "quality and functionality," suggesting they function well
• Nothing in the passage indicates modern cars function poorly
• This completely contradicts the passage's premise about product parity
Common Student Mistakes:
- Did you think the repair issues meant cars are less reliable?
→ The repair problems come from dealership service failures, not car quality issues - Did you confuse service problems with product problems?
→ The passage distinguishes between car quality (which is good) and service quality (which is poor)
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