J.D. Power Report: Price, Exterior Styling, Lack of Incentives & an Unprofessional Sales Staff Cause Consumers to Cross New-Vehicles Off Their Shopping Lists

AGOURA HILLS, Calif.--Jan. 4, 2002--High prices, bland styling and a lack of incentives are some of the key factors that can cause new-vehicle shoppers to reject models they initially considered, according to the inaugural J.D. Power and Associates 2001 Escaped Shopper and Owner Loyalty Study(SM) released today.

The study was designed to determine what causes people to reject one vehicle model in favor of another. It also provides a comprehensive look at consumer perceptions of brands and specific models, as well as how brand loyalty and the salesperson influences consumer decision making.

``While many of our studies focus on what consumers think of a vehicle they've already purchased, this new study taps into the reasons why new-vehicle buyers ultimately cross certain vehicles off their shopping lists,'' said Chris Denove, partner and senior director of automotive research at J.D. Power and Associates.

Overall, price is the most frequently mentioned reason for rejecting a particular model. Vehicles with the highest closing ratios tend to be lower priced than the direct competition and/or offer large incentives (rebates, low-interest-rate financing, etc.). Incentives are a key factor for many shoppers when deciding which vehicle to purchase. For example, 79 percent of Isuzu Rodeo buyers rejected another vehicle because it didn't offer low-interest-rate financing like they found on the Rodeo.

``Incentives are mentioned more frequently than most vehicle-specific attributes such as ride, handling or performance,'' said Denove. ``Manufacturers have painted themselves into a very expensive corner with zero-percent financing. Whoever is able to hold on the longest will certainly gain market share, but at a cost that may make them wish no one ever thought up interest-free financing in the first place.''(a)

While many consumers research and select vehicles based on price/value considerations, others are primarily drawn to a vehicle's style or image, which the study defines as ``passionate'' buyers. These buyers did not seriously consider any other model and stated that they chose their model because they ``fell in love with it.'' Although sports cars, as a group, have the most passionate buyers, the study finds that even practical cars like the Chrysler PT Cruiser can attract very passionate buyers if they offer unique styling that makes an owner want to show off their vehicle.

Bold styling, however, is a hit or miss proposition. Although the Pontiac Aztek ranked as most appealing in its segment among actual owners according to J.D. Power and Associates, more than half of all Aztek shoppers rejected the model because of its exterior styling. Yet, the Volkswagen New Beetle's bold retro look hit the mark -- only 3 percent of Beetles were rejected because a shopper didn't like the styling, which is lower than any other model.

Exterior styling was one of the most frequently mentioned reasons for deciding not to purchase a model. Among those consumers rejecting a vehicle because of styling, most complained that the styling was too bland, or they didn't want to drive something that looked like every other car on the road.

Although passion is important, the study finds that most high-volume models, including the Honda Accord, Toyota Camry and Ford F-Series, have relatively few passionate buyers.

``There is nothing wrong with having a buyer base that isn't passionate about your vehicle, provided that your products perform well when shoppers objectively compare what your vehicle offers relative to the competition,'' said Denove. ``The importance of the dealership experience also cannot be overstated.''

Sixteen percent of survey respondents mentioned that they decided not to purchase a model because they didn't feel that the dealership staff acted professionally. The study shows that when a shopper rejects a dealership because of poor customer service, it's not just the dealer that loses, but the entire brand suffers.

``Most people aren't completely committed to buying one specific model, so when they reject a dealership because of poor customer treatment, they are just as likely to walk across the street to buy a different brand than they are to drive across town to another dealer that sells the same brand,'' said Denove.

The 2001 Escaped Shopper and Owner Loyalty Study is based on responses from more than 29,500 new-vehicle owners who purchased in mid-2001.

Headquartered in Agoura Hills, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on actual responses from millions of consumers annually. J.D. Power and Associates can be accessed through the Internet at www.jdpa.com. Media e-mail contact: michael.greywitt@jdpa.com or john.tews@jdpa.com.

This press release is provided for editorial use only. No advertising or other promotional use can be made of the information in this release or J.D. Power and Associates survey results without the express prior written consent of J.D. Power and Associates.

                       J.D. Power and Associates
           2001 Escaped Shopper and Owner Loyalty Study(SM)

                Top 10 Reasons Cited By Vehicle Owners
                    For Rejecting Particular Models

1.  Total Price Too High
2.  Total Monthly Payment Too High
3.  Didn't Like Exterior Styling/Design
4.  Not Available With Rebates/Incentives
5.  Limited Availability on Dealer Lots
6.  Salespeople/Dealer Not Professional
7.  Not Available With Special Low-Interest Financing
8.  Concerned About Reliability
9.  Didn't Like Look/Design of Interior
10. Dealers Refused to Discount Vehicle

Source: J.D. Power and Associates 2001 Escaped Shopper and Owner
Loyalty Study(SM)