The top brands named in American Customer Satisfaction Index's annual ranking of automakers are Cadillac from General Motors Co. and Toyota Motor Corp.'s namesake division and Lexus line. Toyota, Cadillac, and Lexus were tied at 87 on a scale of 100. Toyota is the only non-premium brand in the top five.
Lincoln and Mercedes-Benz came in next, both getting scores of 86. Meanwhile, BMW dropped to No. 11, with a score of 83. BMW’s lowest mark was in 1997 with a score of 80.
Claes Fornell, the creator of the index, said that Toyota’s score is a “surprise,” considering that it builds a considerable volume of fairly low-priced cars. The scores come from about 70,000 interviews with customers regarding satisfaction with goods and services.
The annual auto rankings were based on data from 5,000 surveys gathered in the second quarter. The score of each company is based on a sample of 250 telephone interviews with consumers. The auto industry went up by 1 point to 83, its second- highest score ever.
The Chrysler brand was the lowest-rated brand with a score of 76. All the seven Asian brands in the index increased, except for Mazda. Honda, scoring 85, and Hyundai, with 83, both achieved a 1.2% increase.
A recent revival in customer satisfaction for international carmakers may hamper the recovery progress made by auto companies in the United States, a report by the American Customer Satisfaction Index (ACSI) says. The report provides not only an update of the national ACSI but also entails customer satisfaction with nameplates offered by domestic and foreign carmakers. The aggregate national ACSI for the second quarter of the year – adjusted for all companies measured in the past 12 months – was around 0.1-percent better than the index in the first quarter at a score of 75.7 on ACSI's 0-100 scale. This means that it is not enough to affect consumer spending or trigger economic growth.
According to Claes Fornell, founder of the ACSI as well as author of “The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference,” the surge in the overall customer satisfaction in the US is very slight. In particular, its impact on consumer demand diminishes in a struggling economy. He noted that while companies with good satisfaction scores post growing demand, aggregate demand during economic distress is affected by other factors like doubt over the future and job uncertainties, as well as lack of discretionary income. Overall, the ACSI for the auto industry surged 1.2 percent to 83.
Interestingly, two Japanese and one American brands, made it to the top three in ACSI. Lexus, Toyota and Cadillac jumped two, four and one percentage points, respectively, to 87. In 2010, Lincoln and Buick posted the largest ACSIs. In 2011, Lincoln and Buick dipped three percentage points to 86 and 85, respectively. Mercedes-Benz managed to get the same score of 86, while Honda jumped. To sum up, five of the top seven rankers are luxury brands. Ford and Nissan, meanwhile, leaped two percentage points to 84.
Volkswagen also scored 84 points (plus 4 percentage points) after dropping big time in 2010. BMW fell four percentage points to 83, the same score as Hyundai and GMC which both dropped one percentage point. They are followed by Chevrolet (+3% to 82) and Kia (+1% to 81). Lurking at the bottom are Dodge and Jeep, which gained one and three percentage points, respectively.
Sitting beside them with the same score is Mazda, which dropped one percentage point. Chrysler had a score of 76, after dropping five percentage points. Thanks to quality and supply issues at by Japanese carmakers, Detroit automakers were able compete better, racking up both profit and market share. Despite this, their customer satisfaction scores failed to improve at the same pace and were even lower than their foreign counterparts.
Not only that, Japanese brands Toyota and Honda – two of ACSI leaders – are offering large price discounts in order to recover lost market share. Fornell noted that the discounts offered by Japanese automakers should make competition tough for others, especially since sales in the auto industry are still weak. He added that before, it was Detroit that uses buyer incentives to offset its weaker customer satisfaction.
Now that Japanese carmakers are augmenting their strong customer satisfaction with discounts, US carmaker might have to do the same, which means a probable dent in their profit margins. Although domestic sales did surge – save for the Chrysler and Lincoln nameplates – Detroit’s lower customer satisfaction might hamper its comeback.
Fornell noted that while production issues at Japanese carmakers gave US automakers a chance to hike both market share and earnings, dropping customer satisfaction will make it difficult for Detroit to sustain such gains as their Japanese counterparts start to recoup. Customer satisfaction averages for Ford and General Motors dropped one percentage points to 85 and 84 respectively, while Chrysler scored an average of 78.