14
Aug
07

Customer contentment with U.S. automakers improves sharply as Asian brands drop.

Americans’ satisfaction with domestic vehicle brands increased in the second quarter of this year, while contentment with all but two Asian nameplates dropped from a year ago, according to the University of Michigan’s Consumer Satisfaction Index, released today.

The study is the latest sign that Detroit’s carmakers are gradually gaining ground with U.S. consumers who have long believed that Asian-made cars and trucks are better and more reliable than homegrown models in such measures as quality and reliability.

“Detroit is finally clawing its way out of the bottom,” said study author Claes Fornell, director of the National Quality Research Center at U-M’s Ross School of Business.

The study showed that overall customer satisfaction with cars and trucks hit an all-time high for the fourth straight year, scoring 82 out of a possible 100 points — a 1.2 percent gain from a year ago.

Happier shoppers are good news for the economy and especially the auto industry, which has been suffering amid declining demand for cars and trucks nationwide.

Within the auto industry, the numbers are improving as satisfaction with American brands is tied more to vehicle reliability than cheap pricing, which is a change from past years, Fornell said.

“It used to be that whenever customer satisfaction improved in Detroit, it was because of a price discount,” he said. “Now it comes from quality, which is a much more sustainable path to be on.”

Several brands owned by Ford Motor Co. and General Motors Corp. sharply improved their rankings, while the Toyota, Honda and Nissan nameplates all declined. The only Asian brands that gained ground were South Korea’s Kia and Lexus, Toyota Motor Corp.’s premium marque, which took the top spot.

A number of domestic brands, however, still rate below average, including Ford, Chrysler, Jeep and GM’s Saturn.

Ford nonetheless showed the most improvement in the survey, gaining 3.9 percent, while Toyota fell furthest with a 3.4 percent drop.

The gap between the highest- and lowest-performing brands has been cut from 18 points to 12 points since 1994.

The study, which surveyed more than 5,000 people, also examined consumer satisfaction with personal computers and online search engines.

Overall, consumer satisfaction rose, though barely, for the sixth consecutive quarter. The index was up 1 percent compared to the second quarter a year ago.

One in a series of good signs

The data is yet another sign that Detroit’s carmakers, while still largely at a competitive disadvantage with the top Japanese brands, are gradually narrowing that gap.

Last week, in J.D. Power and Associates’ closely watched long-term dependability study, GM’s Buick tied with Lexus for the top spot. GM’s Cadillac brand and Ford’s Mercury also were in the top five, along with Honda. Last fall, Consumer Reports magazine’s influential report on the most reliable vehicles said that the reliability gap was closing between the Japanese and Americans.

“The domestics have learned how to satisfy consumers more completely,” Global Insight market analyst John Wolkonowicz said Monday.

A number of variables can slant the data in such studies, he said. As buyers age, for example, they tend to be less picky about their vehicles, so brands with an older customer base tend to get higher marks.

“These studies don’t necessarily mean as much as we’d like them to,” Wolkonowicz said. “But the overall trend is indicative of what’s going on.”

Reviews haven’t boosted sales

The improving reviews have yet to translate into success in the showroom. Domestic car companies continue to cede market share to foreign-based rivals, which claimed more than half of U.S. car and truck sales last month for the first time in history.

A reputation for offering higher-quality vehicles has been a driving force in foreign automakers’ ability to win over American consumers.

“Hopefully, this provides some proof in the marketplace that will help us pick up some traction with consumers,” GM spokeswoman Janine Fruehan said. “For us, it’s further confirmation of what we know from our internal metrics.”

Toyota’s slip is a sign the company is beginning to struggle amid rapid growth, U-M’s Fornell said.

Executives at the Japanese car maker have spoken publicly about concerns over keeping quality high as the company adds new models and factories.

“The question is: Is this a stumble or an indication of what’s to come?” Fornell said.

A Toyota spokesperson declined to comment on the study because no one from the company had seen the data.

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