Detroit's Big Three are losing ground

Forbes, Auto

After a slight uptick last year, Detroit's Big Three automakers are losing ground again to Asia and Europe when it comes to customer satisfaction.

Slideshow: Most and Least Satisfying Car Companies

No matter how much American automakers improve, some just can't shake their bad rap.

Despite making strides in quality that put their vehicles on par with the best imports, consumers regard domestic carmakers Chevrolet, Dodge and Jeep as the least satisfying automotive brands, according to the latest American Customer Satisfaction Index (ACSI).

BMW and Lexus have the most satisfied customers of the 21 brands ranked in the annual index, which is published by the University of Michigan.

What this shows, experts say, is that perception supersedes reality when it comes to how people view brands.

Robert Passikoff, founder and president of the marketing research firm Brand Keys Inc. in New York, said the ACSI data implies that consumer perceptions are driven in large part by emotion, which puts American automakers, who continue to suffer from an image crisis, at a disadvantage.

"On a rational perspective, the truth is that the American cars are just as good as the foreign cars," Passikoff said. "There was a time when you bought an American car and when you drove it off the lot, the handles fell off the door. That's not the case anymore."

Still, though everyone can rattle off the names of American car companies, no one associates any particular positive attributes with them, he said. And when consumers don't associate a brand with a specific attribute – like safety or high performance, for instance – they're less likely to embrace it.

For top-scoring BMW and Lexus, the opposite is true. They are known for craftsmanship and quality.

Luxury brands in general earned higher scores than other brands in the index – even the domestic premium brands like General Motors-owned Buick and Cadillac and Ford-owned Lincoln. Though all three had their satisfaction levels slide compared to last year, Buick still ranked fifth, Cadillac sixth, and Lincoln eighth on the overall list.

ACSI founder and author Claes Fornell agreed that the satisfaction scores are influenced by brand perceptions. He said compared to companies in other industries, American carmakers actually are scoring well on satisfaction; they just are not scoring quite as high as their competition in the automotive business.

"The paradox is that [American carmakers] are producing very good products," Fornell said. "It's just that the competition in Europe is better."

Like Buick, Cadillac, and Lincoln/Mercury, two other domestic brands lost ground from last year: Chevrolet and Dodge.

Fornell points to American manufacturers' financial troubles – for example, General Motors, which owns Buick, Cadillac and Chevrolet, had a $15.5 billion second-quarter loss – as hurting their image and likely contributing to the decline in their satisfaction scores. He said rising gas prices also worked against the domestic brands, given their heavy emphasis on large trucks and sports utility vehicles in recent years.

See the accompanying chart for the satisfaction scores of each brand ranked in the index and the change from last year. The ratings are on a scale of zero to 100. The telephone survey asked 5,500 people who bought cars within the past three years how their satisfaction level compared with expectations, how their vehicle compares with their ideal vehicle, and their overall satisfaction level.

This year BMW tied with Lexus – which had topped the list last year – for the highest satisfaction score. Both had an 87.

For Lexus, that score is unchanged from last year. But BMW's score improved 1 point.

Tom Plucinsky, the product and technology communications manager at BMW, said the company's consistent quality has resulted in years of sustained customer satisfaction.

"We've had the same tagline, 'the ultimate driving machine,' for roughly 30 years," he said. "We place each new model that we develop in front of that tagline to make sure that it fits."

There were bright spots among the domestic brands. Saturn showed the strongest improvement of any automaker. It scored an 85, up four points from last year and five points from 2006.

Ford held steady with same score of 80 as last year. The company, which lost a record $5.8 billion in the second quarter, plans to revive its sales by bringing six of the small, fuel-efficient cars it sells in Europe to the North American market by the end of 2012.

"We're getting away from the North American version, the European version," said John Viera, Ford's director of sustainable business strategies. "We're moving toward versions that are truly global."

Carmakers 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.

But for his part, Passikoff believes manufacturers shouldn't put much stock in the scores anyway. He said customer satisfaction is not the same as loyalty, which is a far more useful indicator of future buying behavior.

BMW's Plucinsky agreed. "Brand loyalty is what brings our customers back to us," he said.

"I think BMW's strength is in its brand and in knowing what the brand stands for," he said, adding that the company delivers on what its image promises. "We sell a premium product, and our customers expect a premium service."

The ACSI is produced by the University of Michigan's Ross School of Business in partnership with the American Society for Quality and Claes Fornell International (CFI Group), an Ann Arbor-based research firm.

Slideshow: Most and Least Satisfying Car Companies

Each quarter the index measures consumer satisfaction with different industries using a 100-point scale. Overall it reports on more than 200 companies in 44 industries. The auto sector is measured the second quarter each year.

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