Giving Satisfaction: Detroit Tops Auto Industry Customer Satisfaction

If your competitors are faltering, does that mean you’re getting ahead? That’s a question domestic automakers may be asking themselves, as customer satisfaction with their automobiles has shown resilience despite an overall decline for the industry, according to a report released last week by the American Customer Satisfaction Index (ACSI). Automobile satisfaction dipped 2.4 percent from an all-time industry high to a score of 82 on ACSI’s scale of 100, but Ford and General Motors held steady. Moreover, Ford’s Lincoln-Mercury and GM’s Buick nameplates took the lead in customer satisfaction for the first time ever. Things were not so rosy for Chrysler, which saw two of its three divisions at the bottom of the heap.

“It was not long ago when Detroit’s products were clustered at the bottom of the industry. Although very few automakers improved this year, the domestic ones are either steady or have lost less in customer satisfaction compared with international competition,” says Claes Fornell, founder of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. “In this sense, the near future looks good for Ford and General Motors. Satisfied customers tend to do more repeat business, generate good word-of-mouth and don’t require greater price incentives to come back.”

Even though customer satisfaction with most domestic and foreign automakers declined in 2010 as the recession brought potentially poorer service, U.S. brands showed the smallest drop. Japanese and Korean brands fell the most. The drop in satisfaction with import brands put the U.S. slightly ahead of the Japanese and Koreans for the first time since 2000.

“Although the near future looks promising for General Motors and Ford, at least in a competitive sense, the near term for the economy does not look bright,” says Fornell. “Labor markets show no sign of improvement, financial markets are edgy and consumers are cautious at a time when more household spending would be desirable. Even though ACSI is at a high level, the trend is not upward. Increasing customer satisfaction, rising disposable income and greater consumer confidence would probably be necessary to bring about more spending.” 

Among the individual auto nameplates, the industry winners include:

  • Ford’s Lincoln-Mercury division, which led the pack with a one-point jump to an ACSI score of 89, its highest ever
  • GM’s Buick, unchanged at 88, was second in the overall rankings
  • BMW (?1 percent), Mercedes-Benz (unchanged) and Cadillac (?3 percent), all tied at 86
  • Toyota’s recall-plagued Lexus division was down five percentage points, at 85

And at the other end of the spectrum:

  • Chrysler’s brands dropped below the industry average, with the Chrysler division down 5 percent, to 80
  • Dodge was down 4 percent, to 78
  • Jeep was at the bottom, falling three percent, to 77

A year ago, amid the global recession, discounting and the government’s Cash for Clunkers program helped many brands reach their highest satisfaction levels ever. A smaller customer base saw an increase in value for money, but this has not been sustainable across the industry.

Several automakers all dropped sharply this year from all-time highs set in 2009:

  • Honda (?5 percent, to 84)
  • Hyundai (?4 percent. to 82)
  • Volkswagen (?6 percent, to 81)
  • Chevrolet (?4 percent, to 80)

The same goes for Cadillac, Lexus, Chrysler and Dodge, which all declined from record-high scores last year.

Of the few nameplates that held steady or improved, Nissan made the biggest gain, up 5 percent, to match the industry average at 82. GMC also improved, but less markedly, up 2 percent to 84.

The American Customer Satisfaction Index, founded at the University of Michigan’s Ross School of Business, is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States.