Last year there was cheering in Detroit as two American brands -- Buick and Lincoln -- captured the top spot in the prestigious American Customer Satisfaction Index (ACSI). This year the tables have turned again. After falling last year in the wake of major quality problems, Toyota's Lexus brand (which gained 2 percent) and the Toyota brand (which gained 4 percent) tied for first place in the most recent index at 87. Those two Japanese brands were matched by General Motors' Cadillac (with a 1-percent gain). Overall, the auto industry ACSI score improved by 1.2 percent to 83, indicating the customer satisfaction was up -- but not by much.
According to the study's authors, customer satisfaction resurgence for international carmakers puts Detroit's fledgling recovery in jeopardy. The report investigated customer satisfaction with an array of nameplates offered by domestic and foreign automobile manufacturers, along with an update of the national ACSI, which was up marginally.
"Not only is the increase in the nation's overall customer satisfaction minute, its impact on consumer demand weakens in a struggling economy," says Claes Fornell, founder of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. "While demand generally shifts to companies that do a good job of satisfying their customers, aggregate demand in times of economic distress is hampered by other factors, such as doubt about the future, job uncertainty and lack of discretionary income."
What happened to Buick and Lincoln, the leaders in 2010? Both brands endured 3-percent slumps to 86 and 85, respectively. Mercedes-Benz held steady at 86, while Honda inched up to 85 percent. Among the top seven carmakers in the ACSI, five are luxury brands, with Japan's best U.S. sellers (Honda and Toyota) rounding out the group.
Ford and Nissan didn't finish in the top seven. But on the strength of 2-percent gains, both finished with scores of 84, bringing them very close. Volkswagen experienced a steep drop in 2010, but recovered significantly with one of the biggest gains in the Index this year -- 4 percent -- and it too had an index of 84. While VW was experiencing a big gain, BMW had a big drop, tumbling 4 percent to a 14-year low of 83. That score put BMW on par in customer satisfaction with Hyundai (which gained 1 percent) and GMC (which was down 1 percent). Chevrolet experienced a big 3-percent increase, but reached an index of just 82. Kia had a 1-percent gain to finish at 81.
While General Motors and Ford got some positive news from the study, the third member of the Big Three -- Chrysler -- got nothing but bad news. It turned in the worst scores in the industry, despite that fact that its Dodge brand was up 1 percent and its Jeep brand was up 3 percent. With indexes of 79, both nameplates tied Mazda, the weakest Japanese offering. The Chrysler brand didn't escape either. It suffered its second consecutive 5-percent slump to 76.
"Price discounting by Japanese automakers will make competition very difficult for all others, especially since industry sales remain weak," says Fornell. "It used to be Detroit that was forced to use buyer incentives to compensate for its weaker customer satisfaction. Now, with the Japanese using discounts in addition to their strong customer satisfaction, Detroit will probably have no choice but to respond in kind, putting more pressure on profit margins as a result."
Customer satisfaction averages for the three U.S. automakers show Ford maintaining its lead at 85, followed by General Motors at 84 (both down 1 percent from last year). Chrysler, in contrast, lags significantly behind at an average of 78, occupying the most precarious position with regard to both domestic and international competition. The ACSI is based on data from interviews with approximately 70,000 customers annually. The index was founded at the University of Michigan's Stephen M. Ross School of Business and is produced by ACSI LLC.
Luigi Fraschini is a Driving Today contributing editor based in Cleveland. He writes frequently about a variety of auto industry issues that affect consumers.
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