Effect of Perceived Quality Assurance on Customer Loyalty in Automobile After-Sales Services: Investigating the Mediating Role of Customer Relationship Management

Abstract

This research investigates the impact of perceived quality assurance (PQA) on customer loyalty (CL) in the automotive after-sales service sector in Sri Lanka, focusing on the mediating role of customer relationship management (CRM). Sri Lanka’s unique market dynamics, marked by high vehicle ownership costs and reliance on after-sales services, create a critical need for customer retention strategies. This study addresses the discrepancies in the literature regarding the mediating role of CRM in strengthening the relationship between service quality dimensions touch, reliability, responsiveness, assurance, and empathy and customer loyalty. Previous scholars have highlighted how integrating quality assurance practices and CRM contributes to sustainable customer engagement and loyalty. In developing countries such as Sri Lanka, the quality of after-sales service is critical for automobile customer loyalty because vehicles are often repaired and used for a long time due to the high purchase cost. Hence, the engagement of automobile customers with aftersales services is very high in countries such as Sri Lanka. However, there is a dearth of knowledge regarding how CRM activities mediate the relationship between perceived service quality and customer loyalty of automobile aftersales industry. Therefore, this research aims to examine the relationship between perceived quality assurance and customer loyalty in automobile aftersales services with special reference to Sri Lanka. A quantitative research approach was adopted using a structured survey distributed to a sample of 400 vehicle customers in Sri Lanka. Data collection targeted key dimensions of service quality, CRM practices, and loyalty indicators. Statistical analysis, including descriptive statistics, correlation, and regression analysis, was performed using SPSS software. Hypotheses were developed based on a conceptual framework integrating PQA, CRM, and CL and were tested to determine the strength and direction of relationships among the variables. The results confirm that all dimensions of perceived service quality significantly affect customer loyalty, with assurance and reliability showing the highest impact. CRM emerged as an important mediator, enhancing the impact of reliable quality assurance on loyalty. The findings are consistent with the existing literature, highlighting the importance of service quality dimensions in driving loyalty while expanding knowledge by emphasizing the mediating role of CRM. This study reaffirms the need to integrate robust CRM systems to bridge quality gaps and develop deeper customer relationships. Demographic results indicated that most of the participants were male, had been associated with service providers for more than seven years and lived in the western Province. Cronbach’s Alpha and KMO values were applied to assess the internal reliability and validity of items: all Cronbach’s Alpha values, and all KMO values were above the accepted criteria. Pearson coefficient yielded positive correlation between responsiveness, empathy, and customer loyalty where responsiveness and empathy were most correlated with each other with correlation coefficients higher than 0.7. Estimated results of the regression analysis showed that perceived quality assurance had a very significant positive influence on the dependent variable, customer loyalty and mediating role of CRM. As the table of model summary statistics presented, the R squared values were 0.629 meaning high explanatory power. The overall model indicated the values of B = 0.994 and the significance value of 0.000 for confirming all hypothesis. The study’s reliance on cross-sectional data limits its ability to observe long-term dynamics of customer loyalty. Given the self-reported nature of the data, social desirability bias may affect survey responses. In addition, the single market – Sri Lanka – limits the generalizability of the findings to other geographic contexts or industries. Future studies could address these limitations through longitudinal designs and multi-market comparisons. Theoretically, this research contributes to the limited knowledge on the mediating role of CRM in the PQA-CL relationship in developing economies. In practice, it provides actionable insights for automotive service providers in Sri Lanka, emphasizing the integration of quality assurance and CRM to improve customer satisfaction and loyalty. Recommendations include standardizing service quality delivery, investing in CRM training, and leveraging data analytics to personalize customer interactions. These steps can guide practitioners in designing effective after-sales strategies. Future research could explore digital CRM tools and evolving customer expectations in the automotive sector.