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Overview

Car buyers are thinking American, with Ford, GM up; Chrysler down

New Consumer Reports survey finds fuel economy, quality, safety, price, and value are top considerations among new-car buyers

Last reviewed: August 2009
Car keys being held in front of American flag
 

“Buy American” resonates strongly among car shoppers today, though not all brands are considered equally, according to a new survey by the Consumer Reports National Research Center.

About 80 percent of respondents who are in the market to buy a new car are likely to consider a model from a domestic brand. This compares with less than 50 percent each who are considering Asian or European brands. Ford has benefited the most from the recent turmoil in the auto market, with the largest gain in new-car buyers who say that they are likely to consider buying a Ford model—up 17 percentage points compared with a year ago. The respondents considering buying a GM model were up six percentage points, but those considering a Chrysler model were down 25 percentage points.

Other highlights from the survey:

  • The most important considerations for today’s new-car buyers are fuel economy, quality, safety, price, and value. Less important for most buyers are brand, environmental friendliness, or a manufacturer’s stability as a company. (For our buying advice and tools, see our help for car buyers.)
  • Among new-car shoppers who consider manufacturer incentives important to their choice of vehicle, a long warranty, discounted price, and low interest rate have the most influence on their purchase decision. These are considered more important than cash rebates or programs involving a “job-loss protection” promotion and free or discounted gasoline.
  • Only 9 percent of those interviewed are likely to buy a new car in the next year. That’s less than half of the percentage—19—of new-car buyers in a June 2008 survey, suggesting that the market may not rebound to those levels for some time.
  • Overall, four in 10 consumers said they have put off purchasing a new vehicle, a percentage that reflects the national sales decrease. Among those considering a purchase, 61 percent are looking specifically to buy a used car.

This latest Auto Pulse survey was conducted by the Consumer Reports National Research Center using a nationally representative probability sample. Telephone interviews were conducted with 1,777 adults (18 and older) whose household owns at least one vehicle. Interviewing took place from July 30 to Aug. 3, 2009.

Patriotic shopping

The Detroit 3 automakers have been in the spotlight all year, with Chrysler and General Motors going through heavily publicized bankruptcy proceedings. Despite public concern about the future of those companies, the vast majority of survey respondents—79 percent—say that they are likely to consider a model from an American brand when they buy their next vehicle. And 53 percent say they are very likely, compared with only 27 and 13 percent, respectively, who are very likely to consider an Asian or European brand.

Percent of respondents who are likely to consider a model from an automaker based in these regions:

Brand All respondents New-car buyers Used-car-only buyers
American 79 81 80
Asian 51 47 61
European 37 46 47

Ford gains, Chrysler loses ground

Ford was the only one of the Detroit 3 that did not seek federal assistance, and that has probably helped to bolster Ford’s reputation among car buyers. The company saw the greatest jump in purchase consideration compared with last year, up 10 percentage points among all survey respondents and up 17 percentage points among new-car buyers. This is reflected in the fact that the Ford Focus and Escape were the highest selling domestic models, other than pickups, in July 2009. In recent years, Ford has also made the biggest gains in our testing and reliability ratings. (See What is right and wrong with Detroit.)

Ford’s good news contrasts sharply with Chrysler’s. People considering buying its models dropped a dramatic 28 percentage points among all respondents and 25 percentage points among new-car buyers. And with relatively few new models in the short-term pipeline, it may be some time before the restructured company can improve on the attributes that now matter most to consumers.

General Motors purchase intent has remained relatively even among our respondents, although it is up six percentage points among new-car buyers.

Percentage-point difference in respondents’ propensity to purchase compared to one year ago:

Brand All respondents New-car buyers Used-car-only
Ford +10 +17 +15
General Motors +1 +6 +7
Chrysler -28 -25 -17

Among respondents who said that they were less likely to consider buying a model from a Detroit automaker, the top reasons given for Chrysler and Ford were that the company’s products aren’t appealing. By contrast, the leading reasons for not considering a GM model were concern about the company’s future and the economic condition of the company, even though GM had emerged from bankruptcy weeks before the survey.

Reasons for not considering an American brand:

Chrysler

  • The company’s products don’t appeal to them
  • The economic condition of the company today
  • Concern about the company’s future
  • Low quality of the company’s products

Ford

  • The company’s products don’t appeal to them
  • Low quality of the company’s products

General Motors

  • Concern about the company’s future
  • Economic condition of the company today
  • The company’s products don’t appeal to them

See how these automakers compare in What’s coming from Detroit.

Most important factors when car buying

Our survey results show good news for the American automakers, if they can deliver the attributes that matter most to consumers.For most respondents, the most important consideration in deciding which vehicle to buy is price, followed by fuel economy, safety, and quality. But among active new-car buyers, fuel economy was the most important factor, with quality and safety also rising above price. These are considerably more important than brand, styling, or an automaker’s stability.

For free step-by-step advice on how to choose the right vehicle for you, go to our new-car and used-car buying advice.

Most-important considerations when buying (factors that respondents cited as one of their top three when deciding on their next car):

Factor All respondents New-car buyers Used-car-only buyers
Price 49% 36% 55%
Fuel economy 46 46 51
Safety 42 39 39
Quality 39 42 37
Value 24 24 24
Performance 21 18 26
Brand 16 14 19
Environmentally friendly/green 13 13 10
Design/style 12 19 13
Manufacturer’s stability 12 13 10
Technology/innovation 6 7 5
Manufacturer incentives 4 8 2
Government incentives 3 11 4

The power of incentives

There has been no shortage of sales incentives as automakers have tried to move the metal in these lean sales months. And with automakers becoming increasingly creative in addressing the age-old question “What can I do to sell you this car today?” there is a broad range of offers available.

In our survey, 71 percent of new-car shoppers said that manufacturer incentives were an important consideration in their choice of vehicles. But which incentives have the most pull? A long warranty was the top consideration among all respondents and for active new-car buyers. For both groups, a low interest rate and a discounted price are also more influential than a cash rebate or niche programs, such as “job-loss protection” and free or discounted gasoline.

Automaker incentives considered important to consumers:

Program All respondents New-car buyers
Long warranty 75% 82%
Low interest rate 74 65
Discounted price 72 71
Cash rebate 50 52
Job-loss protection 39 27
Free or discounted gas 38 30
 

Help for car buyers

There are many diverse factors that consumers consider when buying a car. And our latest auto-pulse survey provides a snapshot of what’s most important in today’s economic climate. To help guide car buyers in making smart choices, Consumer Reports provides several car-buying tools:

Free auto buying advice

For a step-by-step strategy on the smart way to buy a new or used car, from how to do your homework to negotiating at the dealership, read our new- and used-car buying advice.

Ratings and recommended vehicles

To find the best vehicles in each category, Consumer Reports tests about 80 vehicles per year, putting each through more than 50 evaluations and ranking them within their category by overall score. Those that meet our stringent requirements earn our recommendation. Subscribers to ConsumerReports.org can access all road-test reports, and our test scores and ratings for reliability, owner cost, owner satisfaction, and overall safety. See our best new-car deals on recommended models.

Price reports

Car buyers who want to get the best deal can take advantage of Consumer Reports’ New Car Price Reports and Used Car Price Reports. The Bottom Line Price, included in every New Car Price Report, factors in the dealer-invoice price and behind-the-scenes dealer incentives to give you a good starting point in your negotiations.