The Washington hearings that brought
automakers Alan Mulally, Robert Nardelli and Rick Wagoner to Capitol Hill to plead their case for bridge loans not only failed to give the loan bill legs in Congress, but has also hurt consumers'
consideration of Detroit auto brands, according to a new survey by Synovate Motoresearch.
Per the survey, which polled 1,000 consumers ages 18 and older early this month, only about a third of
Americans are willing to even consider buying a vehicle from the domestic automakers when they are next in the market for a car or truck.
Scott Miller, CEO of Synovate Motoresearch, says the
30% consideration does not bode well for Ford, GM and Chrysler's current combined market share--around 47%. "It is well below where the domestics have been tracking. "That's well
below current market share and it's a consideration number--it's intention, not purchase; so you are talking forecast of share that is eventually lower than 30%."
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He says
consumers are responding to talk of bankruptcy and restructuring on Capitol Hill. "As a consumer, you are concerned about the value of the purchase, in terms of resale. If a company is no longer
in existence, the value of the car drops, so that plays in their minds. It's a durable good and when you get rid of it, it is expected to have monetary value," he says, adding that the cost
to lease and the availability of financing have a tremendous effect on consideration. Then there are the emotional issues: Is my car dealer going to be around? Who will be at the 800 numbers when I
have trouble? What about parts availability?
He says the bottom line among consumers considering new vehicles in the current environment is risk. "There's so much risk with purchase
of big durable goods already; risks associated with manufacturers' bankruptcy puts more and more risk on the shoulders of the buyer."
The survey ranked brands by the percentage of
respondents who said they would consider that company when they were next in the market for a new vehicle. Toyota came in highest, with 36% of respondents saying they would consider it, followed by GM
and Honda at 29% each, and Ford at 23%. Seventeen percent of survey respondents said they would consider Chrysler and Nissan, while Volkswagen, Hyundai and BMW were selected by 10% or less of
respondents.
Among domestic brands, 29% of those surveyed said they would most consider General Motors, followed by 23% for Ford, and 17% for Chrysler. Eighteen percent of respondents said
they would not consider a domestic brand at all.
Toyota and Honda were ranked as the top two import brands, at 36% and 29% respectively, followed by Nissan at 17%.
Also, the majority
of those surveyed--about 67%¬-are not in favor of the government loaning the domestic automakers money. Younger respondents in the survey were more supportive than older ones to a government
bridge loan to the car companies. And not surprisingly, respondents in the southern U.S. are least likely to support financial assistance while those in the Midwest are more in favor of it. The U.S.
automakers manufacturing operations are focused in the Midwest and Canada. By contrast, the manufacturing footprints for import brands like Toyota, Honda, BMW, Mercedes, VW/Audi and Nissan are all in
the southern states.
Also, the survey suggests an inverse relationship between income and support of the bailout.