Latest JD Power Study Shows Country Of Origin A Major Factor For Buyers

Despite the fact that import vehicles make up nearly 49 percent of the US auto market, the country of origin still plays a crucial role in consumer choice of which make and model to purchase, according to the J.D. Power and Associates 2007 Escaped Shopper StudySM released today. The study provides a comprehensive evaluation of why consumers may consider one model, but ultimately purchase another.

Nearly 80 percent of new-vehicle buyers limit their consideration set to include only domestic models or only import models. Among those who cross-shop for both import and domestic models, consumers who ultimately buy a domestic frequently do so because they simply decide they do not want an import. Buyers of domestic new-vehicles also frequently decide against import brands for financial reasons, most often citing that the import didn’t offer aggressive rebates or other incentives.

Conversely, import buyers who reject a domestic model more frequently point to perceived vehicle attribute deficiencies as key reasons for rejection, such as concerns for reliability, gas mileage or poor resale value.

“These findings point to continued difficulties for the Big Three in Detroit as they try to win back some of the market share they lost to the imports,” said Kara Steslicki, research manager of the automotive retail practice at J.D. Power and Associates. “It also suggests that too few U.S. consumers have caught on to the fact that cars and trucks offered by Detroit automakers are in many cases as good, if not better, than their rivals from Asia and Europe. Reliability and resale value perceptions are difficult to change overnight, especially considering that people are already rejecting domestic vehicles because of this. To win back market share, domestics are faced with two alternatives: either continue outspending imports on incentives, or find vehicle specific opportunities, such as styling or promoting a positive dealer experience, that can have an immediate impact on consumer perceptions of the brand.”

The study also finds the following new-vehicle shopper behavior patterns:

* Nearly 40 percent of all new-vehicle shoppers cite price as a key reason for rejecting a model. Interior (10%), the dealer experience (10%) and quality/reliability concerns (9%) follow as the most influential reasons for rejection.

* Approximately 45 percent of new-vehicle shoppers took a test drive prior to rejecting a model, and nearly 25 percent of consumers tried to negotiate pricing before ultimately purchasing a different model.

* More than 60 percent of rejecters indicate they researched a model on the Internet. Additionally, more than 20 percent of shoppers claim the Internet influenced their decision to reject a model.

* Shoppers who researched a model by using the Internet or by reading a magazine review are nearly half as likely to mention interior issues as the most influential reason for rejecting a model when compared with shoppers who actually visit a dealership (11% versus 5%, respectively).

* While price is a key issue among both hybrid and non-hybrid rejecters, consumers who shop for a hybrid are less likely to reject for price (53%) than consumers who shop for a non-hybrid model (59%).

“Consumers who shop for a hybrid essentially go into the dealership expecting to pay a higher price for their vehicle, so it’s not surprising that the gap between hybrid and non-hybrid shoppers rejecting models due to price is minimal,” said Steslicki.

The 2007 Escaped Shopper Study is based on responses from 31,355 new-vehicle buyers surveyed between May and July 2007.

david989 - 9/27/2007 1:17:07 PM

-3 Boost

To me Japan builds the best cars in the world. I'd never be seen in a low quality product from Korea, America or Germany. Why are the French and Italians still in business with their unreliable and low quality cars?

kart1 - 9/27/2007 1:33:03 PM

+2 Boost

Japan may build the highest quality and the most reliable cars, but they won't be the only country selling cars, because there are other factors people consider when buying cars. For example brand, design, price, power, etc. You can see that all car companies do cars differently and some design feature may be more enticing to one buyer over another. To answer your question on why people buy French cars, well look at them they are weird looking and oddly designed. That may appeal to people. For Italian cars look at their designs, they are very good looking especially Alfas. Maybe Japan does build the best cars, but they don't have everything (meaning that there are some features people like on other cars).

Agent009 - 9/27/2007 1:45:57 PM

+2 Boost

I shop only Japanese (I know hard to believe) and German cars period.

American cars simply don't meet my needs, although I would recommend them to others where the fit might be better.

S4cabriofoxone - 9/27/2007 6:01:32 PM

+3 Boost

kart, I agreed with everything you said, except this:

"Japan may build the highest quality and the most reliable cars, but they won't be the only country selling cars, because there are other factors people consider when buying cars."

Granted, Japanese cars are super-reliable and mostly well-built, but "highest quality" is very vague. Many European vehicles use the most expensive, best-made materials for their interiors, construction and technology. Sometimes, this is prone to break because of the complication. No country clearly makes the "highest quality" vehicles.

cdoke - 9/27/2007 2:13:54 PM

+2 Boost

What an interesting article.

I had the pleasure, and I use the term loosely, of driving a Ford Fusion whilst my baby was in the shop having some work done. It isn’t that I wasn’t impressed with it, it is just that it was not my car.

I found the interior acceptable for the car demographic. The fit was relatively good. Of course most of it was hard plastic- which I detest entirely simply because I am an arrogant spoiled snob (joke)- but for what the vehicle was its execution was fine.

I did find that at first the gearing was funny as the engine had a tendency to rev prematurely in my opinion the noise of which intruded into the cabin. The controls for the climate system I felt were too low and tucked behind the shifter. In addition, I felt the armrest was too far back on the console. The reason for which is the inclusion of two cup holders, which I must admit where not so well done- there were just plastic indentations.

Overall however, I felt that the car was worthy of a $20,000 price tag- The MSRP was slightly above $17,000. So in the end it was a fully acceptable car. Not that I would buy one.

JohnTravolta - 9/27/2007 5:18:29 PM

0 Boost

Re: “It also suggests that too few U.S. consumers have caught on to the fact that cars and trucks offered by Detroit automakers are in many cases as good, if not better, than their rivals from Asia and Europe..." The fact?! What is the premise? If anything it's a postulate, you should be ashamed of your subjective and mendacious comment Kara. Reliability and resale value perceptions? Where do think they came from? They originate from prior ownership experience with cars of vaious brands. The consumers are not monkeys, please don't insult our intelligence. Just because J.D. Power & Associates is well-known, doesn't mean we shouldn't examine the veracity of their views.

Porschinator - 9/27/2007 5:25:33 PM

+1 Boost

Wow David, another thought provoking reply. Thanks for contributing :)

You may want to read this too and tell me what you think:

http://www.businessweek.com/autos/content/aug2007/bw20070810_455098.htm?chan=autos_autos+index+page_top+stories

Wow...Toyota, Nissan, Inifiniti, on the list

http://autos.aol.com/article/general/v2/_a/most-recalled-of-2006/20060720141809990001

Enjoy smart ass :)

Porschinator - 9/27/2007 5:35:36 PM

+2 Boost

There will always be there Patriotic factor. US has a bigger spectrum than most countries because the US has the most diverse demographic thus imports do well.