Consumers Rate Vehicle Quality High Despite Industry Recalls
5 January 2001Polk Study Shows Consumers Rate Vehicle Quality High Despite Industry Recalls
DETROIT, Jan. 4 Although recalls continue to increase throughout the auto industry, consumer attitudes remain positive, according to a study released today by Polk, the longest-standing curator of automobile records in the United States. In fact, nine out of 10 consumers rating their new vehicle experiences said quality, reliability and manufacturer reputation were meeting or exceeding their expectations. The study showed that it takes more than one recall to undermine customer loyalty for a favorite vehicle brand. However, three recalls appear to be the limit. The study showed that at this point, a manufacturer should take extra measures to boost consumer loyalty. Recalls on new vehicles are becoming commonplace in today's fast-moving automotive marketplace. Almost half (43 percent) of all new vehicle buyers reported having at least one recall on their previous vehicle during the first half of the 2000 model year. And as many consumers (six out of 10) are demanding innovative products, manufacturers are attempting to decrease product development time even more. As time to market decreases, recall rates may increase. The Polk Study found that in addition to product innovation, consumers are placing a great deal of importance on the reputation of the manufacturer, quality of the products delivered and reliability over time. It's a challenge for manufacturers to perform well in all areas. Factor Rated for Critically/Very Experience Meets/Exceeds New Vehicle Purchase: Important % Expectations % Reputation of Manufacturer 81.9% 96.0% Quality of Products 92.8% 92.9% Reliability 94.0% 96.3% Innovation of Products 59.9% 96.6% Source: Polk's Manufacturer Loyalty Excelerator(TM), First Half 2000 Model Year "Consumers are demanding vehicles that are consistently reliable and durable," said Melissa Schubart, Polk's loyalty research consultant. "As their vehicle needs change, new vehicle buyers are sometimes forced to buy or lease different brands, particularly if their current manufacturer doesn't have innovative new designs that fit their ever-changing expectations." A Positive Experience Equals Loyalty Trying to retain customers is a challenge for any manufacturer in the competitive automotive environment. The Polk study found that loyalty to a particular vehicle brand decreases when consumers have negative experiences with reputation, quality, reliability and innovation. Polk found new vehicle buyers who left or defected from their previous manufacturer rated their experience with this manufacturer significantly lower than consumers who remained loyal to a particular manufacturer. Experience Met, Exceeded or Far Exceeded Expectations (Previous Vehicle Owned) Attribute: % of Loyalists % of Defectors Reputation of Manufacturer 95.0% 84.2% Quality of Products 91.6% 78.2% Reliability 92.6% 81.2% Innovation 95.4% 89.7% Source: Polk's Manufacturer Loyalty Excelerator(TM), First Half 2000 Model Year "Manufacturers need to continue to monitor loyalty rates and experience ratings for customers experiencing recalls," said Schubart. "If new vehicle sales continue to slow down in the months to come, any negative perceptions of vehicle quality, reputation or reliability may be harmful in maintaining a manufacturer's current market share. Polk's Manufacturer Loyalty Excelerator(TM) report, which is the basis for the Polk Automotive Loyalty rankings and annual awards, is the latest insight into this type of consumer behavior. This report was introduced to the automotive industry in 1995 and was created to provide household loyalty information to manufacturers at many different levels. It is being used to provide loyalty percentages for the entire automotive industry to allow for cross-industry comparisons of loyalty behavior and to examine loyalty at various levels from the industry level down to the vehicle line level. The report measures loyalty throughout the entire model year so that manufacturers may keep abreast of loyalty trends as they occur in the industry.