Sentiment of U.S. car quality goes negative

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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