Role Reversal: Domestic Automakers Show Highest Improvement in Satisfaction

Premium American brands Buick, Cadillac and Lincoln/Mercury lead the industry with increases in customer satisfaction as Honda and Toyota slip.

by THE STAFF OF, ForbesAutos.com

American Customer Satisfaction Index



Q2 '07

Q2 '06

% Change
87
86
1.2%
86
83
3.6%
86
84
2.4%
86
85
1.2%
86
86
0%
86
84
-2.3%
84
87
-3.4%
83
82
1.2%
83
84
-1.2%
82
81
1.2%
82
82
0%
81
80
1.3%
80
77
3.9%
80
78
2.6%
80
78
2.6%
80
79
1.3%
80
82
-2.4%
79
80
-1.3%
Kia
78
77
1.3%
78
79
-1.3%
75
77
-2.6%
All Others
80
78
2.6%
All Auto Companies
82
81
1.2%
All Industries
75
74
0.9%

Source: ACSI

ANN ARBOR — American car companies, particularly premium brands Buick, Cadillac and Lincoln/Mercury, are starting to do a better job of satisfying consumers than some Asian car companies, according to the latest American Customer Satisfaction Index (ACSI). European automakers also show improvements.

As the chart to the right illustrates, domestic manufacturers have the highest percentage increases in customer satisfaction, based on ACSI data. Ford's 3.9 percent increase is the highest of any carmaker.

“Domestic cars are better than ever before,” said Claes Fornell, the University of Michigan professor who heads up the ACSI, “and Detroit is edging closer to the Japanese and Korean brands in terms of satisfaction.”

American premium brands, specifically, are doing well in terms of satisfying customers — better even than Honda and Toyota, companies traditionally known for top quality and bulletproof reliability.

Looking at the ACSI scores, which are based on a 100-point scale, Buick, Cadillac and Lincoln/Mercury all scored 86 for the second quarter of 2007, two points higher than Honda’s and Toyota’s identical scores of 84, three points higher than Mercedes-Benz’s score of 83, and on par with BMW.

What’s more, those American brands all improved in customer satisfaction compared to last year, while Honda and Toyota slipped. In fact, Toyota’s rating dropped the most in the industry versus last year, with a decline of 3.4 percent.

Fornell attributes Honda's and Toyota’s decreases in satisfaction to strains on quality control resulting from increased production that came as a result of higher demand. “When you make more cars, chances are quality is going to slip,” Fornell said. “Detroit’s Big Three [Chrysler, Ford and General Motors] might have an opportunity to take advantage of Toyota’s difficulties in maintaining quality as it increases production.”

Also, Toyota's and Honda’s customer satisfaction scores were so high that they really couldn’t help but fall, he said. “What goes up must come down.”

The opposite applies to American automakers. Satisfaction is way up because of improvements in vehicle quality, Fornell said. In the past, domestic brands saw only slight increases in satisfaction, mostly due to discounts and incentives. But increases in quality have a lasting effect, he said.

Lexus still leads the industry for customer satisfaction, although its ACSI score of 87 is only one point higher than that of Buick, Cadillac and Lincoln/Mercury.

Chrysler and Jeep were the only two domestic automakers showing declines in customer satisfaction, with slumps of 1.3 percent and 2.6 percent, respectively. Jeep has the lowest satisfaction rating in the industry (75), though it's no lower than the average for all companies in all industries.

Ford shows the most improvement in customer satisfaction. Pictured above is the Ford Mustang.
Automakers in general are better than other companies at pleasing consumers, according to ACSI data. The auto industry’s collective customer satisfaction score of 82 is seven points above the average score of 75 for all companies in every industry. Plus, automakers improved satisfaction at a higher rate (1.2 percent) versus the average for all companies (0.9 percent).

The increase in customer satisfaction for the domestic automakers helped balance out the decline with most of the Asian manufacturers.

Customer satisfaction on the whole has been improving steadily for nine quarters, which is the longest upward trend stretch since the ACSI survey began in 1994. But it seems to be flattening out now with consumer spending down across the board, according to a press release put out by the ACSI.

The ACSI is produced by the University of Michigan’s Ross School of Business in partnership with the American Society for Quality (ASQ) and Claes Fornell International (CFI Group), an Ann Arbor-based research firm. Each quarter the index measures different industries that offer products and services in the United States; the auto sector is measured the second quarter each year. The overall ACSI score for a given quarter factors in scores from about 200 companies in 43 industries and from government agencies over the previous four quarters.

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