Auto Buyers' Customer Satisfaction Plunges in Pandemic

First Up 09/01/20

Auto Buyers' Customer Satisfaction Plunges in Pandemic

In a year in which everything seems to be going wrong it probably comes as no surprise that consumers are increasingly frustrated with the auto industry. The Detroit Bureau reports that the finding is part of a new study finding customer satisfaction has fallen to its lowest level since 1999. Only a handful of brands found a way to keep customers happy, according to the American Customer Satisfaction Index, which reported the industry slipping overall by 1.3% this year. It was the third consecutive annual decline, and marks a significant turnaround after customers reported satisfaction levels soaring to record levels following the Great Recession. “The drop in satisfaction was more alarming a year ago, with 21 of 27 nameplates registering ACSI declines, but this ongoing slide pulls the auto industry into uncharted waters,” said David VanAmburg, managing director at the ACSI. Exactly how the pandemic might have played into the downward performance this past year isn’t quite clear, but there is no doubt the industry struggled simply to do business this year. Read more here (Source: The Detroit Bureau). 

Hyundai Sales Slip in Comparison-Skewed Month

Hyundai posted a 8 percent decline in U.S. sales last month as some quirks in the reporting calendar and ongoing challenges from the pandemic ended a brief run in the winning column. According to Automotive News, crossover deliveries rose 6 percent while car demand skidded 27 percent, the company said. In July, Hyundai’s sales advanced less than 1 percent as the company recorded its first monthly increase since February. The automaker continues to benefit from strong retail demand for crossovers, notably for newer models such as the  Palisade and Kona, in another sign the market is bouncing back from the worst of the coronavirus outbreak. Retail sales slipped 2 percent, Hyundai said, while fleet deliveries dropped 63 percent, representing just 4 percent of August volume. “Despite a down market, our SUVs continue to drive sales and deliver results for us and our dealers,” said Randy Parker, vice president for national sales at Hyundai Motor America. Read more here (Source: Automotive News). 

BMW Cutting U.S. Jobs in Down Market

BMW is making work force cuts in the U.S. to adjust for a business slowdown in the wake of the coronavirus pandemic, reports Automotive News. The company is expected to cut about 125 corporate staff positions around the country, according to a source familiar with the plans. The reductions account for less than 10 percent of BMW's non-manufacturing payroll in the U.S. A spokesman declined to disclose the number of jobs being eliminated but noted the cuts do not affect the automaker's large assembly plant in Spartanburg, S.C. "The effects of COVID-19 are far-reaching," BMW of North America CEO Bernhard Kuhnt said in a letter to dealers that was obtained by Automotive News. "Given the reduced size of the business, we now need to . . . re-scale our business across the company accordingly." BMW sales in the first half of the year tumbled 28 percent, with second-quarter volume down nearly 40 percent from a year earlier, as many dealerships were forced into a COVID-19 lockdown in the spring. Read more here (Source: Automotive News). 

Appeals Court Overturns Trump Fuel Economy Penalty Rollback

A U.S. court of appeals on Monday overturned a fuel economy regulatory rollback implemented under the Trump administration that sought to delay the more than doubling of penalties for automakers failing to meet the requirements. According to The Detroit News, the decision could increase automakers' compliance costs substantially, the auto industry had said when the Obama administration adopted the hike in 2016. The industry at large has not met the country's fuel efficiency requirements since 2015, despite more electric vehicles being offered. In a 3-0 decision, the U.S. Court of Appeals for the Second Circuit said the National Highway Traffic Safety Administration's rule in July 2019 that said the penalties no longer applied was far too delayed. It would have had to make that determination over their economic effects in January 2017 at the latest. Read more here (Source: The Detroit News). 

COVID-19 Has Changed the Way People Use Their Vehicles

Since the proliferation of the coronavirus pandemic, cars are taking on even more functions, proving they're not just for transporting people from point A to point B. According to USA Today, two separate surveys showed that many people are increasingly using their cars to get away from the people they live with, get a change of scenery, take a nap, make a personal or business call, get some "me" time or just to feel normal again. These new uses for vehicles are changing what consumers want to buy in their next cars too. For example, some consumers said they now desire off-road capability and more space in their next vehicle. Some people seek added technology so they can work in the car or have entertainment during road trips. In some metro areas, there has been an uptick in searches for sedans. A two-part study done by TrueCar, found that 73% of the 2,000 respondents said they used their cars as a private space to get away from the people they live with. Read more here (Source: USA Today). 

Webinar: An Update on COVID-19's Impact on U.S. Auto Sales

Cox Automotive Senior Economist Charlie Chesbrough returns to AutoTalk for an update on Thursday, September 10 at 2:00 p.m. EDT.

Topics to be reviewed include: 

  • Economic forecast and impact going into the fourth quarter 

  • Consumer sentiment and buying behaviors 

  • Stock market, interest rates, and employment 

  • An outlook for vehicle sales 

  • Current view of new and used retail sales and prices

Click here to register. 

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