J.D. Power and Associates has just released their 2007 Escaped Shopper Study (an APB has been issued). After surveying 31,355 new-vehicle buyers between May and July 2007, J.D.'s mob says that 80 percent of US new car buyers won't cross-shop an import (if they're domestically inclined) or a domestic (if they're a import inclined). That's bad news for The Big 2.8. But it gets worse. The 20 percent of buyers up for grabs "frequently decide against import brands for financial reasons, most often citing that the import didn't offer aggressive rebates or other incentives." In other words, Detroit's fire sales have caught up with them but good; they're high cost producers appealing to a price-focused audience. At the same time, the study says import buyers who reject a domestic model cite "perceived vehicle attribute deficiencies:" concerns for reliability, gas mileage or poor resale value. J.D.'s automotive retail research manager connects the dots. "To win back market share, domestics are faced with two alternatives," Kara Steslicki opines. "Either continue outspending imports on incentives, or find vehicle specific opportunities, such as styling or promoting a positive dealer experience, that can have an immediate impact on consumer perceptions of the brand." Not bloody likely then.
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I thought that was a Ferris wheel on top of the dealership for a second.
The other problem for the D2.801 is that more buyers are switching from domestic to import, rather than the other way around. There was a pie chart from the Wall Street Journal a couple weeks ago that illustrates this, can’t find it right this second.
The race to the bottom continues…
Another reason why it doesn’t look good for the domestic 2.801 is that it just isn’t fashionable to drive a domestic. Look at the current crop of fashionable cars out there:
VW Beetle (German)
Mini (German/British)
Toyota Prius (Japanese)
Another demographic are the people who want a reliable sedan to ferry the family around from day to day. Well, that niche is synonimous with Honda Accord and Toyota Camry. Want a fuel efficient car? Honda Civic and the Toyota Corolla. Toyota and Honda have, somehow ingratiated themselves with certain staple demographics. Once you hook the customers in, they know that they’ll keep coming back. And the more horror stories they hear on websites like TTAC and friends and family, the more they’ll stay away from the big 2.801.
Yup, it doesn’t look good for Detroit…..
I always wondered is the perceived reliability gap between imports and domestics because people who buy imports (on the whole, obviously excluding TTAC readers) take better care of their cars?
Supposedly according to the numbers an average Toyota/Honda buyer has a higher income/education than GM/Ford (or Hyundai/Mitsu for that matter).
Does that translate into better resale value because “richer”, “smarter” people are more likely to not do maintenance on the cheap?
Inquiring minds want to know.
I still think that they need to take some of the brands and just toss them into the landfill.
Yes, launching new brands is expensive, and so is quality control and R&D. Brand has taken a back seat for domestic makers. People recognize Corvette or Escalade, but don’t talk about GM as a brand.
The only two domestic brand with cache left are Jeep and Cadillac. New brand and new product needs to be built. A major investment needs to be begin today. Will this happen? Will management and the union take pay cuts to pay for it? Doubtful.
Nothing to see here.
Well–in my neighborhood (literally) the new domestic metal is getting import buyers to switch to domestic for the very reason Kara Steslicki states—styling !
I switched from a BMW X5 to a Lincoln MKX. A 27 year old yuppie neighbor traded in her Toyota Celica for a Ford Edge. Another friend who has 3 kids traded in her Saab for a Buick Enclave. In all cases—these were conquest transactions and all parties are very happy with their choices now—and given Buick’s and Ford’s recent quality successes—I am sure we will be happy long term. BTW—we all feel very fashionable in our domestics as well
So, unlike some whose sole personal experience with a GM or Ford product is some 10 year old used POS that they acquired for next to nil—the above consumers bought what cobra 213 (Alan) suggests—-competitive domestic product that does not take a back seat to any comparative import.
Umterp, How long have you, your neighbor and your friend owned the products you list? While I hope you’re right (improved quality that will stand the time test), I believe not. Mismanaged companies that have track records of cost cutting product quality cultures typically are not able to turn on a dime.
Again, here’s to hoping I’m wrong. Doubt it, though.
I guess I appear to like to be in good company – I “was” one of the former 80% of domestic minded buyers until my last US “branded” (Mexican built) car – after sticking with US brands for almost all of my car purchases over 30 years – and now after 5 years of non-US brands, I am in the latter 80% of import minded buyers and won’t go back to US brands no matter what.
OK well maybe if all the non-US automakers were to go out of business and I needed a new car, and the “only” choices were US brands, I might have to go back. (In other words, I’ll never go back!)
jkross22 : I have had my Lincoln MKX since Feb and have 12K miles—no issues / no problems. The girl down the street has had her Edge since March—loves it…no issues. Our other friend just got her Enclave–too soon to tell. As far as quality—I do not believe Ford nor Buick had to “turn on a dime” against these models…they simply had to become more consistent and leveage their RECENT quality successes….I believe I will be Ok in both the short and long term. Net, I think your comment belongs in the “perception gap” column.
In the Wall Street Journal article noted by another poster the highest defection rate by far was from the European brands. The recently quality of VW, BMW, Mercedes, Jaguar, Saab and Land Rover vehicles has been way below par and many of their buyers are going elsewhere, including to domestic brands. Have a look at the resale value of a VW Toureg or any Saab for examples of this problem. The majority of European brand trade-in end up on Asian brand lots, but a high fraction end up on the domestic lots as well. Only a minority end up being traded in on another Euro car.
Lost in the story of Asian:Domestic competition is the side story that the European cars are in full retreat in the US. Some brands are obviously in better shape than others, but on the whole the Europeans are getting beaten badly. Saab needs to be put out of it’s misery and probably Jaguar as well. VW is big enough in Europe and makes enough profits on Audi for it to soldier on in the US for a time, but they need a permanent turn around. Right now VW of America is in about as bad of a shape as it was in the mid 1990s. BMW and Mercedes have no choice but to keep at it and Porsche is it’s own special little world.
slateslate most owners of import cars at one time were domestic car owners. I know that I followed the owners manual for servicing of all my cars and I had the service done at the dealership. My Chevy didn’t hold up but my Hondas’ did.
Bottom line if a car owner is the type to get regular maintenance done then they will do so whether they own a domestic or an import. Its not like someone owns a domestic car never gets it serviced will suddenly start making sure every scheduled service item is done when they switch over to buy an import model. Sort of like slobs stay slobs and neat freaks stay neat freaks.
Perception gap or not I wont ever give one more cent of my money to any of those 3 companies. They lie, cheat, steel and screw anyone and everyone they feel like. I believe in supporting responsible GOOD companies, ones with morals and a desire to make the world a better place, not the ones who shit on everyone. The greed business model has got to end in this country or it will be the end of all of us.
I always wondered is the perceived reliability gap between imports and domestics because people who buy imports (on the whole, obviously excluding TTAC readers) take better care of their cars?
I wouldn’t be surprised if this is a factor. I realize this is anecdotal, but my father, who has worked most of his career in GM dealerships, says that nicer cars seem to be better maintained. That is, people would take better care of a Buick Century than a Chevy Celebrity, so the Buick would have fewer problems, even though they were essentially the same car. If people feel like they’ve got a cheap piece of junk, they treat it like a a cheap piece of junk.
I always wondered is the perceived reliability gap between imports and domestics because people who buy imports (on the whole, obviously excluding TTAC readers) take better care of their cars?
What we continously read here are stories of former domestic owners telling us about their nightmare of domestic car ownership.
Stop with all of this “perception gap” talk. It is truly a “CREDIBLITY GAP” Look I don’t care if it is food, clothes, electronics, appliances, or any service that I pay for. If you burn me once and do nothing to satisfy me you have LOST me as a costumer forever! END OF STORY.
This is the problem facing the domestics. 30 years of producing and selling subpar products is more than enough time to kill any public goodwill towards your company and its products.
It kinda like cheating on your spouse and getting caught. Sometimes the damage is irrepairable.
Today the question for those former doemstic car drivers is WHY? Why should they buy a Ford, GM, or Chysler? What are the advantages of taking a risk? Kinda like hiring an ex-con, why take the risk if there are many folks who want the job with clean records.
It’s not just perception gap, despite the best efforts of Big 2.8 cheerleaders to insinuate otherwise. Driving rentals (late model ’05s, ’06s) has made me swear off domestics. My uncle had an atrocious Chrysler Town-and-Country that ate oil and antifreeze like no other. OTOH, my dad had a Chevy Celebrity that lasted 130k+ miles, although it sounded like an old tank.
But why bother with domestics, when my ’01 Accord will run forever?
I agree with KatiePuckrik, it’s about demographics. For my generation (currently in mid 20s), nothing says “I’m a no-nonsense guy with a solid income” like a Camcord. (Lexus and BMW mean “I have rich parents.”) Call me a pansy, but I wouldn’t buy a domestic, just because of the peer pressure. To everyone I know, domestics == cheap.
If the domestics want to come back, they need to stop the fleet sales and dealer incentives. The ads need to be honest. Every male who went to college in this decade has watched some amount of Top Gear. If we don’t know what badge engineering is, we know a friend who does. Saab makes jets and cars, but who the hell cares, when it’s a Chevy Trailblazer underneath? Ford Edge more quiet than Lexus? Just who do they think they’re fooling? They’ve got to stop grasping at straws, get some self-respect and build cars (and make advertisements) we don’t instinctively laugh at.
Personally I think that though the domestic two and change have improved there is still a REALITY GAP.
The “We’re just as good now” arguements seem to stem from what I will call a “high points only” analysis. To whit, “they have high scoring/reliability vehicles, so do we, so it’s all equal now”.
I have looked the full range of data on JDP, CR and Micheal Karesh’s True Delta and see a different story. All of them indicate there are some domestic success stories.
However ALL of them show that these are offset by some domestic disasters and All of these studies indicate that the bulk of the domestic product is still only average.
On the other hand they also indicate that the brands gaining share rarely ever put ANY vehicles below the industry average and that their median vehicles are well above the industry average.
In the area of design it is the same.
Domestics-some very good, some awful, most indifferent.
Market gainers-some great, some average, most very good.
And just try to match up a good reliability and good design combination in Detroit. They exist but are rare.
The remaining poor design and reliabilty vehicles in the domestic lineups contribute to high scores in what I call the (drum roll please) “Bitterness, Anger, Resentment Factor”.
As long as they have a higher BARF score than their competitors they will continue to “hurl” buyers over to the competition.
Just a few thoughts.
Bunter
There is definitely a perception gap that has developed over the past decades when domestic cars were lagging behind their import counterparts in quality and durability. If that gap still exists today we will only know in a few years but the past two decades have certainly has changed both the perception of domestic products as well as the demographic that buys them. For an example of just how much that demographic has changed just go back a couple of month to research that found that owners of domestics had significantly higher chances of defaulting on car loans, suggesting that the domestic buyers are more likely to be less affluent and price conscious consumers which is also why discounts work so well to get them motivated.
This trend will make it more difficult in the near future for the domestics to extract good margins from their products as they will be regarded as ‘discount’ brands (justified or not) and the expectation will be that they are cheaper than imports regardless of the actual quality of the product. Reversing such as trend is not going to happen overnight but it looks like GM and Ford (not so much Chrysler) are doing it with products that come close to imports in quality.
This may be controversial but I don’t think that domestics can, should or will close the gap completely in the near future as this would raise their costs and result in vehicles that are similarly priced to foreign brands. That would most likely not be popular with a large portion of their current buyer demographic. Companies strive to make money not produce quality for the sake of quality so the aim in the short term for the domestics will be to keep their existing demographic and improve their products enough to attract some conquest sales from the fringes of the foreign buyer demographic without driving up their costs.
If they are smart they will invest some effort in differentiating their multitude of brands so that in the future they will be able to offer no-frills value products to the cost sensitive customer as well as make inroads into the market for more quality and image conscious buyers.
Bunter, you truly made me smile if not laugh right out loud in my cubicle. BARF, indeed! As many of you have seen me write before, I’ll never go back to the 2.8. They wasted my time for 30 years. I guess I’m a slow learner…
Redbarchetta, I also have say – I’m of the same opinion to you with regards to buying from companies with good records re: morals and scuples. This is one reason I blanched a bit when my wife wanted to get another Hyundai – but I then realized – what the President of Hyundai did was not “embezzle” money for his own gain – but it was for what we would describe in the US as “activities relating to PACs in Washington” paid for by company money “off the records”. Not illegal or immoral (technically speaking) in the US, but was so (technically speaking) in South Korea.
In any case, it’s her car not mine. So far, so good. Her 2007 Sonata four is a significantly better car in all measures than was the 2002 Sonata V6, thus far. The fact that it was (as I understand it) engineered in Ann Arbor, designed in California and (I know for a fact, at least) built in Alabama, makes it an American car. So I apparently have an American car in the garage next to my 2008 Prius…. which hails from Japan. (My 2005 Prius was virtually faultless).
Altoids: Call me a pansy, but I wouldn’t buy a domestic, just because of the peer pressure….
Sometimes being the contrarian can be fun and rewarding. Accordingly, I would encourage you to “get out of the rentals” and expose yourself to truly competitive domestic offerings—you may be surprised just like the 27 something in my neighborhood who traded in her Toyota Celica for a Ford Edge. She was not laughed at by her friends—to the contrary they think the Edge is pretty cool and have complimented her on the purchase. This girl was hardly a Big 2.8 cheerleader—-just someone who was open minded and not afraid to look at attractive and competitive domestic alternatives
Bunter 1: Clever use of words on the BARF index. If this were 5 years ago—the index on the Domestics would be much higher. Today—not quite so sure. With the exception of sub-compacts, compacts, and uber luxury—I think it is much easier for you to find a competitive (and in some cases superior) domestic than you posit…they are not few and far between.
To wit here is my short list…I do not think there is any BARF on these cars / trucks—-to the contrary—-I think we would be spliting thin hairs and getting into a tit-for-tat discussion around individual preferences vs. import alternatives
Compact: Maybe the new Focus
Mid-size car: Ford Fusion
Large Car: Buick Lucerne
Sporty Car: Ford Mustang GT
Sports Car: Chevy Corvette
Entry level lux: New Cadillac CTS
Mid-Size Crossover: Ford Edge
Large Crossover: GM Outlook / Acadia / Enclave
Minivan: Chrysler Duo
Small SUV: Jeep Wrangler
Mid-Size SUV: Ford Explorer
Large SUV: GM Yukon Duo
Small Truck: NONE
Mid Size Pick-up Truck: Chevy Silverado
Large Pick-up Truck: Ford F250
umpterp85:
While I think the Edge is a sharp looking vehicle (as are its badge-engineered siblings) had your friend looked for a domestic comparable to her Celica she would have been profoundly disappointed. Cobalt, G5… can’t think of any other “sporty” 4-cyl coupes. The Cobalt/G5 are a joke compared to a Celica.
No doubt there are some very good domestic cars/trucks out there. The problem is, you’ve listed all of them! That leaves dozens of also-rans that are still causing BARF (love that!).
I have to agree with you to an extent though. For the first time in a long time there are actually a few domestic cars that I would look at if I were in the market for a vehicle in the segment. But I’m not, so its academic.
umterp85
My point was that finding a domestic with neither design BARF or reliability BARF is difficult.
If you look at the reliability of the individual models you listed a number of them have a fairly good BARF. Look at True Deltas initial numbers for the Outlook, icky.
Some of the others are experiencing some intestinal discomfort.
When several companies can keep virtually their entire line above average I do not consider average worth looking at. Just me.
Getting above average in both design and reliability in a domestic is tough.
At a Honda or Toyota dealer it is normal.
Glenn-Glad I could be of service.
Cheerio,
Hello,
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Nothing new but at least now there is data to back up the preception.
Toyota has done a good job of conveting some domestic truck owners to the new Tundra.
BARF I love it. The best way to discribe the GAP I have seen in a while.
Thanks for the laugh, until I think about the Caddy I pay on that is undrivable and left me with out a single dime to sink into it. Now I’m going to cry.
Lifetime Powertrain Protection Warranty that comes FREE on every Chrysler and Jeep.
Please explain how this works? Because it kinda sound like an “all you can eat” special to me.
If my transmission goes at 150,000 miles will Chysler replace it free of charge?
If it does not cover a transmission replacement at this mileage mark what is the point of stressing that you have a “Lifetime” warranty. Unless of course this is being aimed at the less informed shopper.
Regardless I have owned / driven any number of cars that the engine and gearbox/ transmission was fine but the rest of the vehicle was ready for the scrap heap.
Now I do not wish to come off a being shady here but Chysler products look and feel like that have a lifespan of about 5 years (if you are lucky). I doubt many folks will have a vehicle worth the effort of trying to get a warranty repair on after this time period.
Another point the rental fleets of America really do have a negative effect on Domestic car sales. Ford, GM, and Chysler are absolutely foolish to offer up their products for rent in the same rental agancies that you can rent a Jetta, Accord, Camry, or Sonata from.
The so-called imports seem to send the same cars you buy in the dealer to the rental fleets. The doemstics send striped-out poor handling junk that they cant sell to the rental fleets.
I will use my wife as an example. She is not a car nut and continuously shows interest in domestic products UNTIL she travels and gets a chance to live with one for a day or two. She was just in love with a Calibur until she sat in one and drove one. I sent a week listening to her rag on that POS while she was in Cali. Ooops another sale lost!
I have a different take on rental cars. When you a lower tirm level model you get to know all you will need to know about the dynamics of the car in general. Case in point if you drive a base model Accord you come away with the impression that if this car had some better tires and a few more features it would be perfect. When you drive a rental Impala it lives you with the impression of why the hell would anyone purchase a high-end tirm level of this crappy car?
IF the doemstics had any sense they would be shipping optioned-up “nice” cars to the rental fleets and give the average renter a better drving experience than they get with their own vehicle. When a woman would rather drive a 13 year old Toyota than a new Impala there is something very wrong!
Bunter 1: Before you give Toyota-san a free pass—their recent launches rank pretty high on the BARF scale.
The number of recalls and TSB’s against Toyota’s recent launches well outnumber some of the cars I have listed (check out camry vs. fusion, avalon vs. lucerne, silverado v tundra to name three). Also, recalls and TSB’s take out the “self report” element that can bias some surveys.
Net, just cause you bought a Toyota—does not mean that you can throw away that bottle of Pepto to battle BARF. Gee—wonder if Pepto can work on that BARF like Toyota engine sludge.
Aren’t their rules about soliciting on this site? At least you could target the right demographic, this isn’t auto-idiots.com
Lifetime warranty my ass, we shall see how much honoring of that warranty they do in 5 years, if there not hiding behind some rock like it never existed and telling us it’s fishes lifetime not human.
Speaking of BARF, Craig, your web site looks garish. And it’s proportioned badly. And why would your home page feature a list of cheap accessories as your ‘specials?’ Or accessories specific to a single model year? And the upper picture of Mick’s is muddy and the map is fuzzy.
dean : “While I think the Edge is a sharp looking vehicle (as are its badge-engineered siblings) had your friend looked for a domestic comparable to her Celica she would have been profoundly disappointed. Cobalt, G5… can’t think of any other “sporty” 4-cyl coupes. The Cobalt/G5 are a joke compared to a Celica”
Dean—Well my neighbor can’t compare the Cobalt / G5 to the Celica because the Celica does not exist anymore….same with the MR5. Toyota has killed off any car with a pulse and left my 27 year old neighbor with no choice but to leave. BTW—she found the Highlander and the Rav 4 boring as hell as well.
That Chrysler limited lifetime powertrain warranty isn’t all it is cracked up to be. It only covers DEFECTS, not normal wear. So if an engine wears out it’s valves or rings at 100k miles Chrysler probably will not do anything for you as that is wear and tear, not a defect.
I found a PDF of the warranty here:
http://www.mouseprint.org/wp-content/avert/chryslerlifewarr.pdf
It includes this gem:
“The Lifetime Powertrain Limited Warranty covers the cost of all parts and labor needed to repair a powertrain component listed in section E below that is defective in workmanship and materials.”
What a bunch of double talk. It is also non-transferable, even between family members.
“Either continue outspending imports on incentives, or find vehicle specific opportunities, such as styling or promoting a positive dealer experience, that can have an immediate impact on consumer perceptions of the brand.”
Judging from what’s in the pipeline, option two isn’t happening anytime soon. At least, not on a scale sufficient to effect drastic change.
That leaves option one, which to me, reads a lot like “build ’em in China.” Yikes!
As for Chrysler’s “lifetime” warranty: it’s non-transferable, and the average American trades in their vehicle every five years. So, in practice, it’s just the usual three-to-five year defects-only warranty with a splashy tagline. Granted, there are exceptions.
When they either a) make it transferable, as Hyundai/Kia has the confidence to do, or b) start covering wear items a la BMW and Mercedes, then I’ll start “taking advantage of these offers.”
Today’s Auto news—-Toyota is recalling 55,000 all-weather floormats because they can stick underneath the gas pedal, causing unwanted acceleration. It seems that complaints arose about the unintended acceleration in 2007 Lexus ES 350 sedans.
Can you imagine the outrage if this was Ford or GM ? I can see the headline now….”Things are going so bad for GM that they can’t even design floor mats correctly”
Guess the Lexus owners who were accelerating out of control felt like they had to BARF—eh ?
umterp85, Hey, keep getting the word out. If enough people talk this up, it might depress the price of used ES 350s enough for me to buy one.
Of course, when I do, I’ll check the floormat and make sure it was installed correctly.
Scary Toyota Recall
Until then, I guess I’ll just keep driving my current Toyotas – and saving money.
On one of my previous cars (gosh – not a Toyota) the floormat crawled around like a hyperactive baby. It never occurred to me – or the maker, I guess – that this was something that should be recalled to fix. I would have been really impressed if they had recalled it.
Hmm so people have gotten so dumb and lazy they cant even yank the floormat back in place. I think the point of this is that Lexus dealers are experts at selling those optional floormats to people who don’t even know what they are.
Hmmm, the floormats on our Olds minivan used to scrunch up all the time and I would have to pull ’em back. The Honda which replaced it has little keepers which prevent the floormats from moving forward.
It sounds like Lexus left out the keepers on the floormats and is fixing the problem. Do you think GM will recall it’s vehicles with unsecured floormats for a fix …. nah.
Jthorner and all—This is the way it works—Toyota does not issue a recall—The government does—Toyota had no choice but to abide by the government directive. Again, I repeat—if this had been GM—the outrage would have been “deathwatch” like. When it is Toyota problems—-it is the consumers fault.
The CONSUMER didn’t change the oil thats why there is sludge—the CONSUMER istalled the floor mats incorrectly…yadda yadda yadda
umterp85 :
Again, I repeat—if this had been GM—the outrage would have been “deathwatch” like. When it is Toyota problems—-it is the consumers fault.
I can assure you that TTAC would have ignored the story if it happened to GM.
You may notice that we’re not big into recall stories in general. We consider them a normal part of doing business.
IF a recall seems particularly newsworthy, we might cover it (e.g. Ford cruise control fires). But this one didn’t make the hit parade.
UMTERP85-actually (going back to an earlier post) the point of BARF is that NOBODY (even Toyota)gets a free ride. It is about what the buyer actually experiences.
Every company BARFs out some buyers.
Lets add a new factor, Happy Users Group Score (HUGS, ain’t that cute).
If a company gets more HUGS than BARF they do well. If more BARF they lose.
Bob Lutz (and others) cherry picks the statistics and implies that the perception gap is ALL in the consumers heads.
Looking at the FULL RANGE of statistics I see support for the consumers buying patterns.
It is evidense that there is “perception gap” in Bobus Magnus’ skull.
If the domestics live in denial and do not FINISH closing the real reliability gap that remains their HUGS to BARF ratio will continue to be poor and they will lose market share regardless of how they spin it.
Just a thought.
Cheerio,
Bunter
Re: umterp85 @ September 28th, 2007 at 9:23 am:
Let’s look at some recent Big 2.8 recalls, shall we?
Ford: 8/7/07, 3.6 million recalled, cruise control switch that may short-circuit and start fires.
GM: 8/31/05, 800k recalled, salt corrosion in brake sensor causes anti-lock brake malfunctions. Linked to 228 crashes before recall.
Lexus: 55k recalled because floor mats may scrunch up under the accelerator. Yeah, that’s obviously exactly as bad as fires and brake failures.
When it comes to most Toyota recalls, it IS the consumer’s fault. Lexus is like my parents’ marriage. You know you’ve got it good when the biggest argument is over the shower curtains.
Altoids—-don’t forget the 3 million Toyota owners who had to class action Toyota into action over engine sludge. Also—check the DOT TSB’s & Recall list for all recent Toyota launches—-Cross compare with all recent Ford launches—-I think you will be shocked at what Toyota DIDN’T get rights at launch and what Ford DID get right.