Auto Buyers More Satisfied

[HarleyEarl]

Auto buyers more satisfied

Study says growth in consumer satisfaction with cars, computers and Net is good sign for economy.

David Shepardson / Detroit News Washington Bureau

WASHINGTON -- Americans' satisfaction with their cars and trucks hit an all-time high in the second quarter, with domestic automakers continuing to narrow the gap with their higher-ranked foreign rivals, according to a new study by the University of Michigan to be released today.

Overall, the American Customer Satisfaction Index rated autos 81 on a 100-point scale, up 1.3 percent over the same period last year.

Toyota ranked No. 1, with a score of 87 for the second straight year. But U.S. brands Buick, GMC, Chevrolet and Ford all posted gains, with Buick tied for second place with Honda and Lexus, scoring 86.

Even with the progress, however, Detroit automakers still have a long way to go.

Most U.S. nameplates are among the lowest-scoring and customer satisfaction is improving for the industry as a whole as more Americans buy foreign cars and trucks, said Claes Fornell, who heads the study as director of the National Quality Research Center at U-M's Ross School of Business.

While Ford's score rose to 77, for example, a 2.7 percent gain, that's still the lowest in the industry, tied with Kia and Jeep.

"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, while the more comparable U.S. counterparts, such as GM's Pontiac, DaimlerChrysler's Dodge and Ford remain well behind," Fornell said.

The study, which surveyed more than 5,000 people, also examined consumer satisfaction with personal computers, Internet search engines and online news and information.

Overall, the study found consumer satisfaction rose for the fifth consecutive quarter -- a good sign for the economy in general and U.S. carmakers specifically, whose gains, unlike last year, were not linked mainly to price.

"Detroit still uses incentives, but the recent increase in customer satisfaction has more to do with improvements in quality -- both in product and in service," Fornell said.

Despite tough competition, the difference between the highest and the lowest ranked vehicles has been cut by nearly half since 1999.

Erich Merkle, director of forecasting for IRN Inc., a Grand Rapids auto consulting firm, said automakers can't afford to have problems with new cars after a few months. Toyota delayed launching its Tundra pickup mainly because of quality issues, he said.

Detroit, in part, suffers from "older antiquated facilities, Merkle said. "It's very difficult for the domestics to go punch for punch."

General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group, as well as their foreign rivals, say quality is a priority.

GM sends out 10 million surveys a year and is getting a response rate of 50 percent to measure what its customers think of its products and ways to improve.

"Do we still have work to do? Yes," said GM spokeswoman Janine Fruehan, citing evidence of improved quality such as reduced warranty costs.

Ford spokeswoman Anne Marie Gattari said customers should make their own decisions based "on hands-on research at the dealership" and not just the numbers.

"We know we have a lot of work to do, but we are confident that we are moving in the right direction," Gattari said.

Chrysler spokesman Sam Locricchio said surveys show the company is "continuing to improve quality. The good news is we are in fact improving."

Toyota Motor Corp. spokesman Bill Kwong said its top ranking is due to its belief that "there is no best, there is only better and our belief in continuous improvement in every aspect of our business," Kwong said.

Toyota has suffered through a number of recent high-profile recalls and defect investigations.

Honda Motor Co. spokesman Chris Naughton said improving quality leads to better word of mouth and more sales.

"The competition never lets up and we're always pushing to make vehicles better and better," he said.

Nissan Motor Co. saw the biggest improvement among automakers, jumping 5.1 percent to 82.

"Nissan takes its commitment to customer satisfaction very seriously and is constantly seeking ways to improve customer service, safety and satisfaction," said spokeswoman Jeannine Ginivan.

Economists at U-M suggested the overall increase in customer satisfaction could spur higher consumer spending, despite high gas prices, rising interest rates and growing household debt.

Fornell said 10 years of data showed a strong link between spending and satisfaction.

A key factor is the "gratification one gets from buying and the problem is where is the money going to come from. Today's consumers have always found a way to take on more debt, and we believe that will continue," he said.

Comerica chief economist Dana Johnson was skeptical, however.

"After income, wealth, it's really hard to get consumer confidence as a factor," he said. "With customer satisfaction, you're talking about a pretty small effect."

Johnson said the rise in auto quality is directly attributable to the growing competition: "There's tremendous overcapacity of auto production. People are competing hard to pry the dollars out."

Beyond autos, the survey found that customer satisfaction with personal computers rose 4.1 percent to 77. Apple Computer Inc. led the way with an 83 score. Satisfaction with online search engines is on the decline, however, with Google down 1.2 percent to 81.

News Web sites on average dropped 3 percent to 73, led by a 5 percent drop for CNN.com, which was tied for first with USATODAY.com, which increased 2.4 percent.

Edited August 15, 2006 by HarleyEarl

[HarleyEarl]

What is happening with Ford?!.....they are in the toilet with Kia.

[mustang84]

I'm sure the Power Stroke problems are dragging them down. I wonder when this survey was taken...Ford seems to be doing much better over the last couple years for customer satisfaction, with the Fusion and Mustang getting top marks.

[PurdueGuy]

I personally think the Saturn dealers are slipping further & further into the "just another dealership" category, and forgetting things that set them apart in the early days.

[Dsuupr]

Part of Saturn and Pontiac's problem are product. Newly designed product always excites a buyer longer.

Think of it. You've been shopping around for that new car and decide to take the Ion home. Once you get home the first thing that happens is the neighbor comes over to talk to you about your new car. With that he shows you his kids new civic. Obviously the civic is a much nicer car than the Ion. No longer is the excitement of the Ion there.

Now redo the same situation with a newly designed Astra, or ???