August 15, 2006

Car Buyers are Happier, but Detroit Lags: Survey

By Jui Chakravorty

DETROIT -- U.S. consumer satisfaction with their vehicle purchases has reached an all-time high, but ratings for domestic automakers mostly lagged those for foreign competitors, according to a national survey released on Tuesday.

The University of Michigan American Customer Satisfaction Index, a measure of consumer attitudes about businesses and the economy, said customer satisfaction with automobiles rose 1.3 percent to 81 points, driven by an improvement in quality.

The score, out of a total 100 points, is based on a survey of more than 5,000 buyers about quality, service and price.

Consumers said quality had improved this year, while last year's increase stemmed from massive summer discounts from U.S. automakers, according to the study.

"At least there is now a glimmer of hope here that Detroit is finally going in the right direction," said Claes Fornell, head of the Index at the University of Michigan. He added that increases in satisfaction due to price incentives were not sustainable.

Complaints are at a 10-year low and value-for-money ratings are at an all-time high, the study showed.

"But the most important story is quality," Fornell said. "According to customers, the quality of both products and accompanying service provided by the manufacturer has improved over the past year."

The study showed that U.S. automakers such as General Motors Corp. and Ford Motor Co., which have been losing U.S. market share to foreign rivals, continued to lag overseas competitors such as Toyota Motor Corp. and Honda Motor Co. Ltd.

"Although Detroit is narrowing the gap a bit, there is still a long way to go," Fornell said. " ... most of Detroit's nameplates are among the lower-scoring cars."

Toyota, which is expected to overtake GM as the world's largest automaker in a year, topped the charts with a score of 87, unchanged from a year earlier. Customer satisfaction with GM's Buick brand rose 2.4 percent to 86 points. Honda's Honda brand and Toyota's Lexus brand also scored an 86, while BMW received an 85.

Customer satisfaction for Ford fell from 2004 to the lowest score in the industry last year, the study showed. The brand remained in last place this year, although its score improved by 3 percent to 77.

"It remains a telling indicator that only the higher-end nameplates like Buick, Cadillac and Lincoln are competitive on customer satisfaction with the Toyota, Honda, and Hyundai nameplates," Fornell said, "while the more comparable U.S. counterparts, such as GM's Pontiac, Daimler-Chrysler's Dodge and Ford, remain well behind."