US Consumer's Positive Opinions Of Cars Industry Soars

It has been decades since US car companies and their products were viewed as superior to their foreign counterparts, particularly those made by Japanese automakers.  Positive ratings of the automobile industry spiked to 39% this year, up from 24% in 2009, a record one-year improvement in Gallup’s annual poll on industries, the polling company said.

The auto industry still lags computer companies and restaurants  in overall positive ratings by consumers. But the news is good for a sector that saw its annual sales drop from 16 million to just above 10 million from 2005 to 2009. American car firms stand to benefit from the improvement in public opinion. GM had a 50% share of the American market in the 1960s. That is down to 20% today.

Efforts by The Big Three, such as they can still be called that, to improve quality have worked. Research firms such as Consumer Reports and JDPower have shown a consistent improvement in the quality of American-made cars. At the same time, Japanese automakers, particularly Toyota (NYSE: TM), have lost ground. Toyota’s rankings took a precipitous fall after that company recalled about eight million vehicles worldwide earlier this year.

U.S. automakers are reaping the benefits of their improving reputation with consumers. Ford Motor’s (NYSE: F) sales have moved up sharply this year as have the sales of the divisions that GM has kept open–Chevrolet, Cadillac, Buick, and GMC. Toyota’s sales have lagged.
Gallup reports that the primary reason for the drop-off in the public’s perception in the two years before most recent poll was their financial woes. “The automobile industry’s image suffered as the three major U.S. automakers struggled during the economic downturn, with all three asking the federal government for assistance,” the poll says.

The American car industry is not out of the woods yet. Perhaps the improving consumer view of the industry will help. The Big Three are still being challenged from foreign automakers  such as Hyundai and VW, which like Nissan and Honda (NYSE: HMC), are working to pick up share. What the US firms lost over the last few decades they will have to fight to retain, even if the American consumer thinks better of the entire sector.

Douglas A. McIntyre