Domestic Cars Bow to Imports in ACSI 2017

Latest data from the American Customer Satisfaction Index finds drivers less happy with their vehicles, as the automobile industry slips 1.2% to a score of 81 (scale of 0 to 100). The downturn comes after a year when sales peaked and driver satisfaction improved. The bad news, however, is primarily on the domestic side as many imports are excluded from the decline. Foreign-made vehicles continue to have the highest driver satisfaction and 77% of the above-average nameplates in the ACSI are imports.

For the overall industry, demand seems somewhat saturated, and total car sales dropped in the first half of 2017. Customer satisfaction also retreats, but individual nameplates post more year-over-year gains than losses. Among the 25 car brands tracked by the ACSI, 12 improve and 8 decline—4 of which are domestic plates. The gap between international and domestic automakers widens as U.S. companies fall to a combined ACSI score of 80 compared with 82 for European and Asian carmakers.

Domestic and International Automakers: 5-Year ACSI Trends

General Motors is the only U.S. automaker to improve customer satisfaction this year, stepping up to take the lead at 82. Ford falls behind GM with a drop to 81, followed by Fiat Chrysler at 77. While all three manufacturers posted sales declines for the first half of 2017, GM’s was by far the smallest.

Domestic Automakers: 5-Year ACSI Trends

Although U.S. cars have improved much over the years, Detroit automakers have not been as consistent in quality and customer satisfaction compared with their international counterparts. This year, lagging customer satisfaction is not about deteriorating quality, but rather lack of innovation compared with imports. Recalls also negatively impact satisfaction, and a growing number of surveyed drivers report experiencing a recall.

For the overall industry, vehicle dependability remains steady from a year ago, but drivers rate technology (controls, displays, navigation, video systems) and driving performance lower in 2017 for both mass-market and luxury cars. The least-satisfying aspect of the driving experience continues to be gas mileage—from SUVs to economy brands, consumers seek better mileage from their vehicles.

ACSI Report: Customer Satisfaction Challenges for Detroit »

Consumer Affairs: Consumers Less Satisfied With New Car Choices »

NBC News: Imports Beat Domestic Cars in Customer Satisfaction »

Autos: Ongoing Recalls Deflate Driver Satisfaction

With automobile recalls at record-high levels, it comes as no surprise that car buyer satisfaction declines for a third straight year, according to recent results from the American Customer Satisfaction Index (ACSI). At the industry level, driver satisfaction falls 3.7% to 79 on ACSI’s 100-point scale in 2015, and nearly all nameplates lose ground in the eyes of their customers.

While consumers are seeing a rapid influx of technology innovation that is transforming the driving experience, recalls are becoming a more common occurrence for car owners. The ACSI automobile customer satisfaction survey asks all respondents to indicate whether or not their car has been the subject of a recall since the time of purchase, allowing researchers to investigate the impact of recalls on satisfaction.

In 2011, ACSI researchers used a pooled sample of 2010 and 2011 data to show that customers who experience recalls are significantly less satisfied with their cars than those who have not. One of the industry’s highest-profile recalls happened before and during that period—Japanese automaker Toyota’s massive, worldwide safety recall that started in 2009.

Recalls generally signal major quality defects, so it is not unexpected that they will depress satisfaction. But, as automobiles become more and more complex, there is the possibility that consumers could come to accept recalls as a normal part of car ownership. Nevertheless, ACSI data from the past three years confirm the 2011 findings. Customer satisfaction for owners who experience recalls is significantly lower than non-recall respondents, and the percentage of owners that say they have gone through a recall has increased substantially in 2015.

2015-auto-recall-satisfaction

The negative impact of recalls on automakers does not end with lower satisfaction. Because there is nearly a one-to-one relationship between satisfaction and customer loyalty for this industry, recalls create customers who are significantly more likely to defect to a competitor the next time they purchase a car. And because current customers are generally “cheaper” customers for automakers (requiring fewer acquisition costs), recalls have tangible and negative economic consequences for automakers. A pooled sample of 2013 to 2015 data for all nameplates shows that customers who experience recalls are significantly less likely to be repeat buyers.

2015-auto-recall-retention

Satisfaction declines caused by recalls also have a host of indirect, negative consequences because satisfaction drives behaviors such as word-of-mouth, cross-selling, up-selling, brand image, and corporate reputation. Like many other nameplates, Volkswagen’s driver satisfaction tumbles 5% in 2015, but the drop is based on interviews that took place prior to the company’s well-publicized emissions scandal. Although diesel engines are less widely used in the United States than elsewhere around the globe, the revelation of emissions rigging by Volkswagen—along with the sheer number of vehicles that the company will now recall and refit—could be devastating on future satisfaction. Current customers may be even less likely to repurchase from Volkswagen if they perceive the company’s actions as a breach of trust.

ACSI Automobiles Report 2015 »

Associated Press: Survey: Recalls Make Americans Less Satisfied With Cars »

 Michigan Radio: Recalls, Cost, Taking Toll on Customer Satisfaction With Cars »

USA TODAY: Deluge of Recalls Dings Auto Customer Satisfaction as Lexus Earns ACSI’s Top Spot »

Driver Satisfaction Shake-Up for Luxury Cars

Drivers who opt for luxury are typically among the most satisfied, according to two decades of ACSI research on customer satisfaction with automobiles and light vehicles. When it comes to premium-priced vehicles, manufacturers strive to pair top-notch service with features aimed at comfort and luxury—all of which helps boost satisfaction.

ACSI findings for 2014, however, reveal widespread deterioration in driver satisfaction. Among 21 measured car brands, 80% show some decline in ACSI compared with the prior year. The two that take the hardest hit are both luxury makes: Acura and Cadillac. By contrast, Germany’s Mercedes-Benz still leads the field as it did in 2013, albeit at the lower ACSI score of 86, while GM’s Buick is one of only two nameplates to post a gain (+1% to 83).

With a sharp drop of 7%, Honda’s Acura tumbles down to last place for 2014. In its second year of measurement, Acura scores 77, down from 83 a year ago. Another luxury newcomer to ACSI, Audi, inhabits the low end with a debut score of 79.

auto-compare-4

Cadillac, GM’s flagship luxury make, plunges 6% to 80, failing to score above average for the first time in ACSI history. The drop in customer satisfaction for Cadillac coincides with news that the brand’s August year-on-year sales in the U.S. are down 18%, in sharp contrast to the industry’s overall gain of 5.5%.

View more automobile scores »

AutoGuide: Mercedes, Subaru Top Customer Satisfaction Survey »

Bloomberg: GM’s Chevrolet, Buick Achieve Sole Gains in Auto Survey »

MarketWatch: The most hated car company in America is »

The Wall Street Journal: Automotive Customer Satisfaction Dips for Second Straight Year »

ACSI Research Insights: Automobile Satisfaction and Recalls

Earlier this month, ACSI released its 2011 report on the Automobiles and Light Vehicles industry. The August ACSI Commentary focused on the difficult situation faced by U.S. automakers as they experience declining customer satisfaction, while the Japanese automakers gain in satisfaction and the Europeans maintain their lead.  Here we offer a few additional research insights gleaned from the ACSI study, focusing on the effects of automobile recalls. The ACSI customer satisfaction survey asks all respondents to the auto study to indicate whether their car has been the subject of a recall since the time of purchase, providing the data that allows us to investigate the impact of recalls on satisfaction.

Over the last few years, a series of high-profile auto recalls (most notably, the massive, worldwide Toyota recall that began in 2009) have garnered significant media attention. What impact, if any, does the experience of a recall have on customer satisfaction? While it may seem obvious that a recall signals a significant quality defect and therefore depresses satisfaction, it is also possible that consumers have come to accept recalls (a fairly common event) as a normal part of car ownership.

Using a pooled sample of 2010 and 2011 data for all of the nameplates measured within the industry, ACSI data suggests that customers who have experienced a recall are significantly less satisfied with their car than those who have not. As shown in the first chart below, car owners who experienced a recall have an ACSI score of 79, compared to a significantly higher score of 84 for those who have not.

But the negative impact of a recall for an automaker does not end with lower satisfaction. Because there is a nearly 1-to-1 relationship between satisfaction and customer loyalty for this industry, these findings also show that recalls create customers who are significantly more likely to defect to a competitor the next time they purchase a car.  Again using a pooled sample of 2010 and 2011 data for all nameplates measured by ACSI, the data shows that customers who have experienced a recall indicate they are 4 percentage points less likely to remain customers of the same automaker when they next purchase an automobile, as shown in the second chart above.

There are two vital conclusions that should be drawn from these findings. First, auto recalls, no matter how common, well-publicized, or necessary for public safety, have a negative impact on customer satisfaction for an automaker. As satisfaction drives behaviors like word-of-mouth, cross-selling, up-selling, brand image, corporate reputation, and so forth, the drop in satisfaction caused by a recall has a number of negative indirect consequences for carmakers. Perhaps more significantly, however, is the impact of a recall on customer loyalty. Customers who have experienced a recall indicate that they are significantly less likely to be retained as customers in the future. As current customers are generally “cheaper” customers for any firm (requiring fewer acquisition costs), the impact of a recall on loyalty represents a tangible and negative economic consequence for an automaker.

GM and Ford Make Headlines. Where’s Chrysler?

While Lincoln and Buick made headlines for snagging the top two slots in ACSI’s 2010 results released last month, the third contender of the proverbial Big Three was conspicuously absent. Of course, the headlines could have taken a different twist—Jeep, Dodge Place Last in Satisfaction. At 77 and 78, Jeep and Dodge brands are indeed the worst satisfiers this year, with the Chrysler nameplate somewhat higher, but still below the average at 80.

ACSI results at the corporate level for the Big Three show Ford and GM brands holding to an average of 86 and 85, respectively, while Chrysler overall declines 4% to an average of 78, far below their domestic competitors. ACSI also compares U.S. versus Asian nameplates (Japan and Korea) each year, and this year the U.S. nameplates edge out Asian nameplates very slightly for the first time since 2000. If Chrysler’s lower performing brands were removed from the U.S. group, Detroit’s advantage would gain considerably.

Chrysler and GM both received bailouts that were met with uneven sentiment in the popular media, while Ford alone maneuvered through the height of the recession bailout-free. Certainly that may have helped Ford’s image in recent months, but Chrysler shows a long history of lagging behind Ford and GM in ACSI. Dodge’s satisfaction peaked at 81 in 2009 (below the industry average of 84), while Jeep has never gotten past 79. The Chrysler nameplate hit 84 in 2009, but looking at all of its measures since 1994, the brand most often ends up at a middling level of 80 (10 out of 17 years).

Click here to see the complete ACSI results for the auto industry.

Media Highlights August 2010

Press Release, August 17, 2010—Detroit Tops Auto Industry for the First Time Ever
CBS News, Ford, GM Models Top Customer Satisfaction Survey.
The Wall Street Journal, Ford, GM Brands Top Customer Satisfaction – Study
Chicago Sun-Times, U.S. Car makers top satisfaction list