U.S. automakers slip in owner satisfaction
08-25-04, 07:20 AM
#1
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U.S. automakers slip in owner satisfaction
U.S. automakers slip in owner satisfaction
Customers want value as gap between U.S., Japanese brands grows
By Ed Garsten / The Detroit News
Detroit’s automakers are losing ground in customer satisfaction to their Asian and European rivals, a trend that could hinder efforts by GM, Ford and Chrysler to win back market share, says a study released Monday.
While General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group now boast comparable quality and reliability ratings with foreign automakers, they still lag in a more subjective area — value for money — in the eyes of consumers, according to the University of Michigan’s American Customer Satisfaction Index.
The satisfaction gap between U.S. and Japanese and European automakers can be traced back to the hefty rebates offered on most domestic cars and trucks, said Claes Fornell, director of the study.
“U.S. nameplates use much more discounting than the Japanese, but it’s backfiring,” Fornell said. “It conveys, perhaps, less quality so people somehow don’t quite perceive the value is there.”
In July, the average incentive spending per vehicle from GM, Ford and Chrysler was $4,088, up from $4,000 a year earlier, according to Autodata Corp. Japanese automakers were offering far less last month — $1,498 per vehicle on average — as were the European brands — $2,783.
The U-M study contrasts with other surveys showing GM, Ford and Chrysler have narrowed the gap on quality, reliability and satisfaction with the sales and ownership experience.
While some consumers are drawn to Detroit’s cars and trucks because of price, Fornell said they’ll likely defect to Japanese brands for their next purchase.
“This is not good news for what will happen to market share and sales,” he said.
At the end of July, Detroit’s traditional Big Three controlled 58.9 percent of the U.S. market, down from 60.4 percent a year ago, according to Autodata Corp. A point of market share equals roughly 170,000 vehicles a year.
European automakers have lost ground as well, with 6.6 percent of the U.S. market now compared with 7 percent a year ago.
Meanwhile, Asian automakers have increased their share of the U.S. market to 34.5 percent, from 32.5 percent.
The U-M study examined responses from about 20,000 vehicle owners nationwide, and includes data on only the best-selling brands.
The customer satisfaction index is scored on a scale of zero to 100. The index gauges satisfaction with different products and services each quarter.
Despite the fact that customer satisfaction remains at its highest level in 10 years, the study said the outlook for consumer spending on all goods and services is clouded.
“Even though consumers are inclined to spend more, they may not have the means,” Fornell said. “Income is not rising and credit is becoming more costly, so I worry about the overall picture.”
In the latest study, consumers were asked about their overall satisfaction, value and expectation with their vehicles.
The auto industry as a whole saw its satisfaction rating drop 1.3 percent to 79 of 100. Of six nameplates at or below the industry average, five are domestic brands, with DaimlerChrysler’s Dodge brand last at 75.
Chrysler Group spokesman Kevin McCormick said the automaker has made aggressive moves to bolster the value of its new products, such as the Dodge Magnum wagon, Chrysler 300C sedan and 2005 Jeep Grand Cherokee SUV.
“The results regarding value absolutely do not apply to us,” McCormick said. “We have priced those to significantly unlock the value that’s held in those vehicles.”
The biggest piece of good news from Detroit’s perspective came from Ford’s Lincoln and Mercury brands, which posted an 8.9 percent improvement from last year’s study to lead all brands with a score of 86.
“Lincoln owners are, by tradition, more satisfied,” Fornell said. “It means many will come back when they’re ready to replace their vehicles with new ones.”
But the Ford brand languished next to last at 76, down from 80 a year ago.
Ford spokesman David Reuter said the automaker has made gains in customer satisfaction and expects that trend to continue in the face of incentives.
“With the many new products we’re introducing this year, we are focused on continuing to improve residual values and customer satisfaction,” Reuter said. “We also expect these products to sell with lower incentives.”
Honda Motor Co. was in second place with a score of 85, up from 82 last year. BMW AG and Toyota Motor Co. slipped to 84 from 85 last year to tie for third place. Volkswagen AG’s score was 80, up from 76, while Volvo dropped to 80 from 81 last year.
GM’s Cadillac brand suffered an erosion in customer satisfaction with a score of 83, down from 87 last year. GM spokesman Dan Flores said other independent studies that measure quality and long-term durability show Cadillac making progress.
“If you look at the initial quality study (by J.D. Power and Associates) Cadillac cars surpassed Lexus cars, and the success at Cadillac in the last several years would tend to indicate Cadillac is doing things customers like,” Flores said.
GM must continue offering rebates, Flores said, to maintain enough sales volume to keep factories running to offset health care and retiree benefit costs.
Although Japanese and European automakers offer incentives, the discounts are largely invisible, coming in the form of cash given by the companies to dealers to close sales.
source MORE HERE
Customers want value as gap between U.S., Japanese brands grows
By Ed Garsten / The Detroit News
Detroit’s automakers are losing ground in customer satisfaction to their Asian and European rivals, a trend that could hinder efforts by GM, Ford and Chrysler to win back market share, says a study released Monday.
While General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group now boast comparable quality and reliability ratings with foreign automakers, they still lag in a more subjective area — value for money — in the eyes of consumers, according to the University of Michigan’s American Customer Satisfaction Index.
The satisfaction gap between U.S. and Japanese and European automakers can be traced back to the hefty rebates offered on most domestic cars and trucks, said Claes Fornell, director of the study.
“U.S. nameplates use much more discounting than the Japanese, but it’s backfiring,” Fornell said. “It conveys, perhaps, less quality so people somehow don’t quite perceive the value is there.”
In July, the average incentive spending per vehicle from GM, Ford and Chrysler was $4,088, up from $4,000 a year earlier, according to Autodata Corp. Japanese automakers were offering far less last month — $1,498 per vehicle on average — as were the European brands — $2,783.
The U-M study contrasts with other surveys showing GM, Ford and Chrysler have narrowed the gap on quality, reliability and satisfaction with the sales and ownership experience.
While some consumers are drawn to Detroit’s cars and trucks because of price, Fornell said they’ll likely defect to Japanese brands for their next purchase.
“This is not good news for what will happen to market share and sales,” he said.
At the end of July, Detroit’s traditional Big Three controlled 58.9 percent of the U.S. market, down from 60.4 percent a year ago, according to Autodata Corp. A point of market share equals roughly 170,000 vehicles a year.
European automakers have lost ground as well, with 6.6 percent of the U.S. market now compared with 7 percent a year ago.
Meanwhile, Asian automakers have increased their share of the U.S. market to 34.5 percent, from 32.5 percent.
The U-M study examined responses from about 20,000 vehicle owners nationwide, and includes data on only the best-selling brands.
The customer satisfaction index is scored on a scale of zero to 100. The index gauges satisfaction with different products and services each quarter.
Despite the fact that customer satisfaction remains at its highest level in 10 years, the study said the outlook for consumer spending on all goods and services is clouded.
“Even though consumers are inclined to spend more, they may not have the means,” Fornell said. “Income is not rising and credit is becoming more costly, so I worry about the overall picture.”
In the latest study, consumers were asked about their overall satisfaction, value and expectation with their vehicles.
The auto industry as a whole saw its satisfaction rating drop 1.3 percent to 79 of 100. Of six nameplates at or below the industry average, five are domestic brands, with DaimlerChrysler’s Dodge brand last at 75.
Chrysler Group spokesman Kevin McCormick said the automaker has made aggressive moves to bolster the value of its new products, such as the Dodge Magnum wagon, Chrysler 300C sedan and 2005 Jeep Grand Cherokee SUV.
“The results regarding value absolutely do not apply to us,” McCormick said. “We have priced those to significantly unlock the value that’s held in those vehicles.”
The biggest piece of good news from Detroit’s perspective came from Ford’s Lincoln and Mercury brands, which posted an 8.9 percent improvement from last year’s study to lead all brands with a score of 86.
“Lincoln owners are, by tradition, more satisfied,” Fornell said. “It means many will come back when they’re ready to replace their vehicles with new ones.”
But the Ford brand languished next to last at 76, down from 80 a year ago.
Ford spokesman David Reuter said the automaker has made gains in customer satisfaction and expects that trend to continue in the face of incentives.
“With the many new products we’re introducing this year, we are focused on continuing to improve residual values and customer satisfaction,” Reuter said. “We also expect these products to sell with lower incentives.”
Honda Motor Co. was in second place with a score of 85, up from 82 last year. BMW AG and Toyota Motor Co. slipped to 84 from 85 last year to tie for third place. Volkswagen AG’s score was 80, up from 76, while Volvo dropped to 80 from 81 last year.
GM’s Cadillac brand suffered an erosion in customer satisfaction with a score of 83, down from 87 last year. GM spokesman Dan Flores said other independent studies that measure quality and long-term durability show Cadillac making progress.
“If you look at the initial quality study (by J.D. Power and Associates) Cadillac cars surpassed Lexus cars, and the success at Cadillac in the last several years would tend to indicate Cadillac is doing things customers like,” Flores said.
GM must continue offering rebates, Flores said, to maintain enough sales volume to keep factories running to offset health care and retiree benefit costs.
Although Japanese and European automakers offer incentives, the discounts are largely invisible, coming in the form of cash given by the companies to dealers to close sales.
source MORE HERE
08-25-04, 07:26 AM
#2
Lexus Fanatic
The real story here has not been Asian automakers in general but the Koreans....specifically Hyundai and Kia...which this article practically ignored. Both companies ( Kia is actually Hyundai-owned) have made astounding gains recently in quality, sales, profits, customer satisfaction, and value for the money. They are the real threat to Detroit in the future....more so than the Japanese.
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