J.D. Power and Associates Reports: The Desire to 'Buy American' Drives Many New-Vehicle Shoppers to Purchase Domestic Rather Than Import Nameplates

WESTLAKE VILLAGE, Calif., Sept. 26 -- Despite the fact that import vehicles make up nearly 49 percent of the U.S. auto market, the country of origin still plays a crucial role in consumer choice of which make and model to purchase, according to the J.D. Power and Associates 2007 Escaped Shopper Study(SM) released today. The study provides a comprehensive evaluation of why consumers may consider one model, but ultimately purchase another.

Nearly 80 percent of new-vehicle buyers limit their consideration set to include only domestic models or only import models. Among those who cross-shop for both import and domestic models, consumers who ultimately buy a domestic frequently do so because they simply decide they do not want an import. Buyers of domestic new-vehicles also frequently decide against import brands for financial reasons, most often citing that the import didn't offer aggressive rebates or other incentives.

Conversely, import buyers who reject a domestic model more frequently point to perceived vehicle attribute deficiencies as key reasons for rejection, such as concerns for reliability, gas mileage or poor resale value.

"These findings point to continued difficulties for the Big Three in Detroit as they try to win back some of the market share they lost to the imports," said Kara Steslicki, research manager of the automotive retail practice at J.D. Power and Associates. "It also suggests that too few U.S. consumers have caught on to the fact that cars and trucks offered by Detroit automakers are in many cases as good, if not better, than their rivals from Asia and Europe. Reliability and resale value perceptions are difficult to change overnight, especially considering that people are already rejecting domestic vehicles because of this. To win back market share, domestics are faced with two alternatives: either continue outspending imports on incentives, or find vehicle specific opportunities, such as styling or promoting a positive dealer experience, that can have an immediate impact on consumer perceptions of the brand."

  The study also finds the following new-vehicle shopper behavior patterns:

  --  Nearly 40 percent of all new-vehicle shoppers cite price as a key
      reason for rejecting a model. Interior (10%), the dealer experience
      (10%) and quality/reliability concerns (9%) follow as the most
      influential reasons for rejection.
  --  Approximately 45 percent of new-vehicle shoppers took a test drive
      prior to rejecting a model, and nearly 25 percent of consumers tried
      to negotiate pricing before ultimately purchasing a different model.
  --  More than 60 percent of rejecters indicate they researched a model on
      the Internet. Additionally, more than 20 percent of shoppers claim the
      Internet influenced their decision to reject a model.
  --  Shoppers who researched a model by using the Internet or by reading a
      magazine review are nearly half as likely to mention interior issues
      as the most influential reason for rejecting a model when compared
      with shoppers who actually visit a dealership (11% versus 5%,
      respectively).
  --  While price is a key issue among both hybrid and non-hybrid rejecters,
      consumers who shop for a hybrid are less likely to reject for price
      (53%) than consumers who shop for a non-hybrid model (59%).

"Consumers who shop for a hybrid essentially go into the dealership expecting to pay a higher price for their vehicle, so it's not surprising that the gap between hybrid and non-hybrid shoppers rejecting models due to price is minimal," said Steslicki.

The 2007 Escaped Shopper Study is based on responses from 31,355 new-vehicle buyers surveyed between May and July 2007.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit http://jdpower.com/. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2006 were $6.3 billion. Additional information is available at http://www.mcgraw-hill.com/.