One of the few hopes the U.S. car companies have had is that they have been perceived as closing the quality gap with Japanese models. Recent JP Power data shows Detroit running in a dead heat with imports in the consumer satisfaction race.
That bubble has been at least partially burst due to new information from the University of Michigan's American Customer Satisfaction Index. According to the AP, "U.S. car buyers are growing less satisfied with their purchases from domestic automakers while their Asian and European competitors continue to improve."
In the new survey, BMW and Lexus tied for the top spot followed by Honda (NYSE: HMC) and Toyota (NYSE: TM). Several brands from GM (NYSE: GM) and Ford (NYSE: F) dropped down the rankings.
At the risk of stating the obvious, Detroit is in such deep trouble that a perceived drop in the quality of its cars can only make its recovery more difficult. There are several ways around that, but none of them are very palatable.
GM yesterday introduced buyer incentives across most of its brands. That means its margins on those vehicles will be lower. It may pick up some market share, but any victory there will be costly. The U.S. car companies are cutting their marketing budgets, so they cannot "advertise" their way out of the problem.
Effectively giving cars away can certainly help hurdle the quality barrier, but losing a lot more money could sink a large U.S. auto company.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
8-19-2008 @ 4:50PM
scubapop01 said...
I think you are wrong our USA auto that is the big three are even better then those other brands of forigen auto"s start reporting fairly I know who ever wrote this artical is for foriegn auto's
8-21-2008 @ 5:15PM
russell said...
Look You can give me all the % you want , but let me tell you 1 thing and 1 thing only In Japan Out of 100% sales of autos the Japenese buy 96% japanese makes and 4% for the rest of the manufacturing market (bmw Volkswagon and the big3) This Country better pull together or the largest and biggest maufacturing companies are all going to build oversees and then see what happens CAN YOU say DEPRESSION no jobs no sales No income !!!!!!!!!!!
8-20-2008 @ 8:21AM
Joe said...
Hello Doug McIntyre! It's obvious your anti-american cars. The article you refer to was as slanted as you are. That write-up didn't mention the US manufacturers cars that were up to Toyota stands or better and you didn't either. If you want to tell a story, get all the facts - not just the ones you care to print. I can see the Japanese cars in your driveway now. Probably because you can't afford a garage. Get off the Internet and get a real job Doug.
8-20-2008 @ 9:22AM
Saj1010 said...
Doug started the whole article off wrong. He said that the domestics have been "perceived" as closing the quality gap when in fact they have closed the quality gap but the perception is not there yet. This survey consisted of 5,000 respondents via telephone. Now let's look at this realistically, out of the ones contacted who is more likely not to hang up on them. The import buyer who is forever defensive for buying something that destroys the industrial base of their home country and in order to justify their traiterous purchase they have to make it sound like it is the best thing since sliced bread. I'm not saying every respondent on the import side were dishonest in this manner, however enough are to skew the numbers in their favor. On the flip side, more of your domestic buyers are of the variety that put about as much effort into preventive maintenance that they do into personal hygeine. They are the ones who run their car into a tree causing the passenger door to cave in and never fix it. Then when the phone rings they tell the survey taker that the passenger window won't roll down. Forgetting to mention that they are responsible. On the flip side, a Toyota Camry or Avalon buyer gets the same call and in spite of the fact that their bulletproof Toyota is currently in the shop for the sixth time to try and get the transmission to shift correctly they tell the survery taker that their ride has never been in the shop for nothing other then oil changes.
8-20-2008 @ 10:00AM
jpdr1100 said...
LOL.
So the defensive ones are foreign car buyers who truthfully answer about their car owning experience, but the ones who need to go one blogs and bash them are not?
If import buyers were actually feeling guilty, they would be the ones denigrating their cars. Looks like you have it backwards, Saj.
8-21-2008 @ 12:10PM
jpdr1100 said...
Hey Russell, how about naming for us the largest selling car brand in China?
Hint: its initials are G and M.
8-21-2008 @ 11:59AM
Saj1010 said...
Hey jpdr,
It's called human nature. You buy a vehicle that you perceived to be better and as a result you pay an import premium (Honda&Toyota) thinking it will be a trouble free ride. Over time you realize that your neighbor who has a Ford in his driveway is in the shop the same amount of time or less. All along he and a few others have pointed out to you that you wasted the $2,000 premium spent on your Civic compared to his Focus. Perhaps guilt was the wrong word to use. Maybe embarrassed is a better description of how one would feel. But when the surveyor calls this is your chance to make it look like you made the right decision. If in the end JD Power or Consumer reports says your car is better than his you can justify to him that your car is in fact better built even though deep down inside you know it's not true. Lying on the survey helps you save face in the neighborhood.
While the flipside is someone who does do the rational thing and buys a domestic. Any problem that you have makes you feel like you made the wrong choice since the media is constantly pounding into to you the fact that you should have paid the extra $2,000 for the better built import. So when you answer that survey you feel like you have to report everything that was wrong since you took the cheap way out and are now paying for it. So this is your chance to punish the domestics for letting you down.
Even with the biased reporting on surveys such as these the imports can barely beat Ford and GM. Imagine taking trucks out of the equation since they are a larger portion of the domestics product portfolio and sales. Is seems likely that Honda and Toyota would be well behind F and GM, probably not Chrysler. In short, Honda and Toyota do not deserve a premium in transaction price and the sooner that the perception that they do is eliminated the better.
I've seen your posts on this and other posting boards so I realize that rationality is not your strong suit. Bashing facts that go against your preconceived notions is more your forte. Thusly I don't expect you to understand any of this. But have good day nonetheless.
8-25-2008 @ 10:26AM
m said...
i havent bought an american car since i returned my 1974 chevy vega a week after i bought it. there isnt an american car engine that can last more than two hundred thousand miles. i dont know of a decent american car that gets over 25 mpg. my 1995 honda accord ex, has over 200,000 miles on it. it hums like a little bird. japanese cars arent perfect for sure. but a honda engine has to be murdered in order for it to die.
8-25-2008 @ 1:28PM
PHIL said...
thought this was interesting.
1. Which country can boast that their brands occupy 2 of the
top 3 spots for long-term reliability?
a. Germany
b. Japan
c. Korea
d. United States
2. As of August 2007, which manufacturer had the most recalled
vehicles in the U.S. for that year?
a. Chrysler
b. Ford
c. GM
d. Nissan
e. Toyota
f. Volkswagen
3. Pick the brand from each group that has the highest initial
quality.
a. Acura, BMW, Cadillac (all luxury makes)
b. Honda, Mercury, Nissan (all non-luxury makes)
c. Acura (lux), Chevrolet (non-lux), BMW (lux), Mazda (non-lux)
4. Which midsize sedan has the highest initial quality?
a. Accord (Honda)
b. Altima (Nissan)
c. Camry (Toyota)
d. Malibu (Chevrolet)
5. Which large sedan has the highest initial quality?
a. Avalon (Toyota)
b. Grand Prix (Pontiac)
c. Sable (Mercury)
6. Which midsize pickup has the highest initial quality?
a. Dakota (Dodge)
b. Ranger (Ford)
c. Tacoma (Toyota)
7. Which car is the most economical overall?
a. Aveo (Chevrolet)
b. Fit (Honda)
c. Prius (Toyota)
8. Which car did the LA Times describe as a better car than
BMW or Mercedes or Lexus or Infiniti?
a. A6 (Audi)
b. CTS (Cadillac)
c. RL (Acura)
9. Which company makes the winner of the 2008 Green Car of the
Year award?
a. Chevrolet
b. Honda
c. Toyota
10. Which car was selected by the North American automotive press
corps as the North American Car of the Year for 2007?
a. Aura (Saturn)
b. Camry (Toyota)
c. Fit (Honda)
11. Which car won the same award for 2008?
a. Accord (Honda)
b. Altima coupe (Nissan)
c. Malibu (Chevrolet)
12. Which company had a luxury vehicle, a midsize sedan, and a large
truck removed from the Consumer Reports recommended vehicles list in
October 2007 because of mounting quality problems?
a. Chrysler
b. Ford
c. General Motors
d. Hyundai
e. Toyota
f. Volkswagen
ANSWERS:
1. Which country can boast that their brands occupy 2 of the top 3
spots for long-term reliability?
Answer: United States.
Per J.D. Power Vehicle Dependability Study, Mercury and Cadillac are
in the top 3, along with Lexus. And in 2007, Buick was tied with Lexus
for the top spot.
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2...
2. As of August 2007, which manufacturer had the most recalled
vehicles in the U.S. for that year?
Answer: Volkswagen.
According to Business Week, Volkswagen had the most recalls at this
time a year ago. The second worst was Toyota.
http://www.businessweek.com/autos/content/aug2007/bw20070810_455098.htm
3. Pick the brand from each group that has the highest initial
quality.
a. Answer : Cadillac (better than both Acura and BMW)
b. Answer: Mercury (better than both Honda and Nissan)
c. Answer: Chevrolet (better than Acura, BMW, and Mazda)
This is according to J.D. Powers Initial Quality Survey.
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2...
4. Which midsize sedan has the highest initial quality?
Answer: The Chevrolet Malibu has better initial quality than any
competitor, including the Honda Accord, Toyota Camry and Nissan
Altima. The Ford Fusion also beat all 3 Japanese competitors.
This too is from the J.D. Power Initial Quality Survey, which also
reveals that above average are American brands Mercury, Ford,
Cadillac, Chevrolet , Pontiac, Lincoln, and Buick. Below average are
import brands Acura, Kia, Nissan, BMW, Mazda, VW, Subaru, and Scion
(and several others).
http://www.jdpower.com/autos/articles/2008-Initial-Quality:-Midsize-a...
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2...
5. Which large sedan has the highest initial quality?
Answer: Again per J.D. Power, the highest quality large car is the
Pontiac Grand Prix, beating the Toyota Avalon. Two other Detroit cars
that beat the Avalon are the Mercury Sable and Mercury Grand Marquis.
http://www.jdpower.com/autos/articles/2008-Initial-Quality:-Midsize-a...
6. Which midsize pickup has the highest initial quality?
Answer: The Dodge Dakota has the best quality for midsize pickups,
proving that Chrysler too can beat the imports. Both the Dakota and
the Ford Ranger beat the Toyota Tacoma.
http://www.jdpower.com/autos/articles/2008-Initial-Quality:-Pickups-a...
7. Which car is the most economical overall?
Answer: Per Edmunds.com, the premier automotive analysis site, the
most economical car in America, taking into account not only mileage
but all costs, is the Chevrolet Aveo. The Honda Fit is #3 and the
Toyota Prius is a distant #34.
http://www.edmunds.com/help/about/press/127806/article.html
8. Which car did the Los Angeles Times describe as a better car
than BMW or Mercedes or Lexus or Infiniti?
Answer: Cadillac makes a better car than BMW or Mercedes or Lexus or
Infiniti, and that car is the 2008 CTS. No other car in the mass
market dares so much as this expressive and audacious bit of
automotive avant-gardism. Dan Neil, LA Times.
http://www.latimes.com/classified/automotive/highway1/la-hy-neil12dec...
9. Which company makes the winner of the 2008 Green Car of the Year
award?
Answer: The Chevrolet Tahoe Hybrid is the winner of this award. How
could a full-size SUV defeat the media darling Toyota Prius? Read the
link below and you will discover, Whats equally eye-opening is that
the Tahoes 21 mpg city fuel efficiency rating is the same as that of
the city EPA rating for the four-cylinder Toyota Camry sedan.
Did you catch that? A huge, full-size SUV from Chevrolet that gets
the same city mileage as a 4-cylinder Toyota Camry!! Chevy obtained
this remarkable achievement through the use of its 2-mode hybrid
system, a technology that Toyota does not have.
http://www.greencar.com/features/2008greencar/
10. Which car was selected by the North American automotive press
corps as the North American Car of the Year for 2007?
Answer: Not only was the Saturn Aura picked by the automotive press
corps as better than the Honda Fit and the Toyota Camry, When a panel
of 47 journalists named the Saturn Aura the North American Car of the
Year over the Toyota Camry, the vote wasn't even close, 205-89.
Chicago Tribune, 1/15/07
http://www.northamericancaroftheyear.org/news.html
11. Which car won the same award for 2008?
Answer: GM again crushed the Japanese competition in 2008 when the
Malibu received 190 votes to the Honda Accords 95. The Accord
actually came in 3rd since GMs other finalist, the Cadillac CTS,
received 165 votes.
http://www.northamericancaroftheyear.org/news.html
12. Which company had a luxury vehicle, a midsize sedan, and a large
truck removed from the Consumer Reports recommended vehicles list in
October 2007 because of mounting quality problems?
Answer: Toyotas much publicized quality problems resulted in
Consumer Reports actually removing from their recommended vehicles
list the Lexus GS luxury car, Camry V6 sedan, and Tundra pickup. This
demotion occurred in October 2007.
If you are one of the many Americans who gave up on Detroits cars
because of a bad experience many years ago, its time to rethink your
position. Rethink Detroit.
Detroit automakers: 79 U.S. jobs per 2,500 cars sold in America.
Foreign automakers: 33 U.S. jobs per 2,500 cars sold in America.
http://levelfieldinstitute.org/
"NUFF SAID" IDIOTS...
9-03-2008 @ 1:36AM
ProWrench said...
GM SUCKS!!! My Mother has a 2006 Cobalt with less than 5000 miles on it. She is almost 70 and drives in an extremely gentle manner. The crap wagon has left her stranded and been in the shop multiple times for multiple problems such as the headlights quit working, a broken half-shaft, ignition coil for #1 cylinder failed and many more.
Initially all were covered by warranty, but last week she got a bill from the dealer demanding payment for the work and even the towing because GM will not or has not reimbursed them for the warranty repairs.
Gee I wonder why Toyota & Honda are taking over? People simply get tired of this crap. We can tolerate the shortcomings of buying GM to an extent but charging us for YOUR engineering mistakes, poor workmanship and low quality is absolutely suicide on GM's behalf. They should show a little gratitude to her for buying GM with the other choices she has.
I have told her to not pay the bill, she will be one of those customers suing GM if we get just one more letter or have ANY other problems with this TURD! If the market were any better at all I would sell it and buy a higher quality car for her.
GM has much bigger problems than a few people saving a couple of bucks.
M. Curley