Issue: Apr 2009


AutoPacific Research Indicates Balance of Year May Continue to be Difficult for Car Companies



by Jon Knox

A national Internet survey conducted between March 31 and April 1 reveals that the American public is extremely aware of the current challenges facing the American automobile industry and the Obama administration’s actions to confront them. Only three percent in the survey said they were not aware of the billions of dollars in government loan guarantees made to General Motors and Chrysler, 94 percent knew that both companies had been required to submit viability plans in hopes of receiving additional government aid, and 89 percent were aware that the White House had declared neither plan represented “a credible path to viability.” The survey findings were the result of over 700 responses.

Additional findings from the survey: 

52% expressed concern about buying a GM vehicle 

63% expressed concern about buying a Chrysler vehicle 

When those previously considering buying a GM product were asked if the White House rejection of the GM plan were now more or less inclined to buy from GM, the response was 3:1 against purchase. The response was virtually identical from 
Chrysler considerers. 

72% said that because Ford has not asked for government loan guarantees, they were more likely to consider a Ford Motor Company product. Only 15% expressed concern about buying a Ford product. 

72% said it would more than a year before they would be in the market to buy a new car 

“This survey highlights how very aware the general public is of the current condition of the American automobile industry, and their hesitation about buying a car at this time,” said George C. Peterson, president, AutoPacific, who conducted the survey. “It indicates that car companies will continue to struggle with sales for sometime.”

In response to the question “Why would/wouldn’t you purchase a vehicle from a manufacturer who is restructuring under bankruptcy proceedings?” one respondent wrote, “To take a chance on a car made by unhappy workers is not a good idea in the best of times. To buy a car and then have the company restructure and lose dealerships, parts or warranty…is not worth the risk of my money.”

Among other findings in the AutoPacific survey: 

71 % of respondents said Chrysler should partner with FIAT, as the White House has suggested. 

Approximately 70% of respondents said that both GM and Chrysler should restructure under bankruptcy, but 45% that they would not purchase a vehicle from an auto company in bankruptcy. 

Most respondents (72%) were aware of the new government-backed warranty program, and about half said that would provide additional confidence. 

“The reservations shown in this survey about buying from a company in bankruptcy illustrate the need to expedite any bankruptcy proceedings in order to get buyers back into dealerships,” added Peterson.

The survey asked respondents about nine different possible incentive programs which might encourage them to buy a new car in the next 6 months. The most popular included; 

$3,000 cash back from the manufacturer 

A sales tax credit on next year’s federal taxes 

A fuel efficiency incentive program (cash rebate from the government equal to combined fuel economy rating times $100 (Example: 30 mpg x $100 = $3,000) 

AutoPacific is a future-oriented automotive marketing research and product-consulting firm. Every year AutoPacific publishes a wide variety of syndicated studies on the automotive industry. The firm, founded in 1986, also conducts extensive proprietary research and consulting for auto manufacturers, distributors, marketers and suppliers worldwide. Company headquarters and its state-of-the-art automotive research facility are in Tustin, California, with an affiliate office in the Detroit area. Additional information can be found on AutoPacific's websites: http://www.autopacific.com  and http://news.vehiclevoice.com

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