• by Karl Greenberg , July 31, 2007

General Motors and Toyota came out on top in joint-venture IntelliChoice.com and AutoPacific Motorist Choice Awards (MCA), which is in its second year. The study, which combines IntelliChoice's Cost-of-ownership data with AutoPacific's owner satisfaction data from new car and truck buyers, gave Japanese makes leading slots in most of the 25 vehicle segments.

But GM's Cadillac DTS was the top vehicle in the large luxury segment, and its Silverado was the first-place vehicle in large light-duty and heavy-duty segments.

Other winners: Lexus IS won in "aspirational luxury," a segment that includes BMW 3-Series and Audi A4 and Cadillac CTS. Mazda3 was the vehicle in the "compact" segment, and Chevy's HHR was top compact crossover SUV. Honda's Odyssey was voted top minivan.

The study gave 25 vehicles outstanding marks, including Lexus GS, Lincoln Town Car, Chevrolet Tahoe and Suburban, Mercedes-Benz S-Class, Acura RL and the BMW 5-Series.

The study offers a 50/50 combination of IntelliChoice's empirical analyses with AutoPacific consumer surveys. "We are purely identifying the cost of ownership of every car on the road," says James Bell, publisher of the Campbell, Calif.-based company. "And we do that with algorithms fine-tuned over the last 21 years that have been refined to the point of being highly accurate. So there's no consumer element at all--it's all empirical analysis."

The two firms aim in opposite directions: While IntelliChoice's cost-of-ownership research is 'consumer facing,' offered to buyers low in the purchase funnel weighing specific vehicles, Tustin, Calif., and Southfield-Mich.-based AutoPacific is an industry consultancy whose data on consumer preferences is offered to automakers.

George Peterson, president of AutoPacific, says his firm's rankings are based on responses from 24,500 mail queries, with scores based on relative importance on a five-point scale of 38 vehicle attributes. IntelliChoice contributes data on resale value, fuel efficiency, maintenance and other parameters comprising cost of ownership.

Bell says the two companies' decision to create a hybrid study came from--apologies to Reese's--a "chocolate in your peanut butter" moment. "The project came from their saying 'your cost of ownership data is useless because it doesn't have real people's impressions," says Bell. "But we said, 'your data is only about people's impressions, and you can't tell what their state of mind is when they fill out the survey.' So we went back and forth on this and came to the realization that we should merge the two."

Thus, when cost of ownership is thrown into the mix, vehicles that are pleasing to consumers can drop right off of the list. "The big surprise were the automakers that have no vehicles making the MCA list," says Peterson, who notes that certain vehicles that rank high on AutoPacific's own product-satisfaction reports were nowhere to be seen on the MCA. "Another surprise is--there are no entries from Ford, or Chrysler or Hyundai, which do well on our other studies," he says.

That the influence on consumers' opinion of value may have nothing to do with the physical vehicle is apparent in the case of Chrysler, according to Peterson. In Ford's case, "in our own research, the new Ford Edge and Fusion and Lincoln MKZ do beautifully, and Ford is winning awards in our other research"--but Ford's lag in value-adds like warranties has had an influence on the cost-of-ownership equation, which reflects, he says, Ford's notable absence from the study.

"Warranties from Chrysler, GM, Hyundai, even Mitsubishi blew Ford out of the water. Ford fought back by adopting a five-year, 60,000-mile warranty, but GM responded with five-year, 100,000-mile warranty." He says that Chrysler's new lifetime powertrain warranty, introduced late last week, will help them establish a value position.

Bell says Ford and Chrysler, weighted still in truck sales, are seeing cost issues from fuel prices, plus fleet sales to rental companies, which affect resale value.

Peterson says that when AutoPacific did its research, DaimlerChrysler had just put Chrysler on the block, "so some of the satisfaction data reflected a lot of uncertainty out there."

Hyundai, meanwhile, turned itself around five years ago--literally recreating itself, with both new products and a 10-year, 100,000 mile warranty. The company recently placed No. 75 in Business Week/Interbrand's "Best Global Brands" survey. But it was under the radar of the MCA study. "The impact [the warranty] has had on Hyundai has been tremendous, but Hyundai, which does well on other research, was such a black mark for so long, it still impacts their depreciation and therefore, their resale value and residuals."

Hyundai, which is improving in cost of ownership, isn't quite at the top of fuel-efficiency numbers, but brand equity--which has everything to do with subjective consumer perception--is hurting their depreciation numbers, says Bell.

"It's a brand-equity issue, so the public element is there; it's driven partly by consumer perception. The market will not reward the Hyundai the same as Honda when it comes to depreciation, even if both vehicles are equally well made," he says. "We expect Hyundai to continue to climb, and the power-train warranty has gone a great way to giving potential buyers much more peace of mind.

"I guess we were surprised that there weren't more of the Korean brands represented," says Bell. "I think that Ford and Chrysler and Dodge have some real work to do on cost of ownership."