dwasson
08-24-2004, 09:38 AM
Incentives on domestic cars tarnish image, customers say
BY JOHN PORRETTO
ASSOCIATED PRESS
August 24, 2004
The cash rebates and financing deals that Detroit's three automakers have used to drive business in recent years are diminishing the value of their vehicles in consumers' eyes, a quarterly survey of customer satisfaction indicates.
The latest American Customer Satisfaction Index, compiled by the University of Michigan, shows satisfaction among owners of domestic brands continues to lag that of Japanese and European companies, despite quality improvements General Motors Corp., Ford Motor Co. and the Chrysler Group of DaimlerChrysler AG made in the past few years.
The new survey, released Tuesday, is based on telephone interviews with roughly 6,000 vehicle owners in the April-June period, ACSI officials said.
"Major recalls notwithstanding, the Big Three are basically holding their own with foreign automakers when it comes to quality and reliability," said Claes Fornell, a business professor at U-M who oversees the index. "Where they fall short is on value for money."
The primary culprit, Fornell said, is incentives that started in earnest soon after the 2001 terrorist attacks and continue to be an industry hallmark and drain on profits.
In July, the average outlay 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.
"What customers are perceiving is they get more value for their money from the Japanese," Fornell said. "Once you resort to that type of promotion, it's difficult to get out of it."
At Ford, spokesman Dave Reuter said the company hopes the upcoming introduction of vehicles such as the next-generation Mustang and Five Hundred sedan, will allow it to sell with lower incentives.
The findings in the index were not all bad.
In terms of overall customer satisfaction, Ford's Lincoln and Mercury brands ranked highest among the 20-plus nameplates in the survey. On a rating scale of 0 to 100, Lincoln-Mercury scored 86, 7 points higher than the industry average and a 6.2-percent improvement from 2003.
Lincoln-Mercury was followed by Honda Motor Co. (85); BMW and Toyota Motor Corp. (84 each); and GM's Buick and Cadillac nameplates (83 each).
Among those scoring below the average of 79: Mazda (78), DaimlerChrysler's Jeep and GM's Chevrolet (77), Ford (76) and Dodge (75).
BY JOHN PORRETTO
ASSOCIATED PRESS
August 24, 2004
The cash rebates and financing deals that Detroit's three automakers have used to drive business in recent years are diminishing the value of their vehicles in consumers' eyes, a quarterly survey of customer satisfaction indicates.
The latest American Customer Satisfaction Index, compiled by the University of Michigan, shows satisfaction among owners of domestic brands continues to lag that of Japanese and European companies, despite quality improvements General Motors Corp., Ford Motor Co. and the Chrysler Group of DaimlerChrysler AG made in the past few years.
The new survey, released Tuesday, is based on telephone interviews with roughly 6,000 vehicle owners in the April-June period, ACSI officials said.
"Major recalls notwithstanding, the Big Three are basically holding their own with foreign automakers when it comes to quality and reliability," said Claes Fornell, a business professor at U-M who oversees the index. "Where they fall short is on value for money."
The primary culprit, Fornell said, is incentives that started in earnest soon after the 2001 terrorist attacks and continue to be an industry hallmark and drain on profits.
In July, the average outlay 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.
"What customers are perceiving is they get more value for their money from the Japanese," Fornell said. "Once you resort to that type of promotion, it's difficult to get out of it."
At Ford, spokesman Dave Reuter said the company hopes the upcoming introduction of vehicles such as the next-generation Mustang and Five Hundred sedan, will allow it to sell with lower incentives.
The findings in the index were not all bad.
In terms of overall customer satisfaction, Ford's Lincoln and Mercury brands ranked highest among the 20-plus nameplates in the survey. On a rating scale of 0 to 100, Lincoln-Mercury scored 86, 7 points higher than the industry average and a 6.2-percent improvement from 2003.
Lincoln-Mercury was followed by Honda Motor Co. (85); BMW and Toyota Motor Corp. (84 each); and GM's Buick and Cadillac nameplates (83 each).
Among those scoring below the average of 79: Mazda (78), DaimlerChrysler's Jeep and GM's Chevrolet (77), Ford (76) and Dodge (75).