Study Shows Fewer Consumers are Considering Vehicles from GM and Chrysler
As Chrysler and General Motors fight to stay alive, a study by CNW Research shows consumers aren’t making it any easier for the two struggling American automakers. The study shows the share of car shoppers that say their primary vehicle choice would be from Chrysler or GM has dropped significantly.
The CNW study holds no good news for the two struggling automakers. Car shoppers who say their first choice would be from one of GM’s brands dropped 12 percent and Chrysler’s share dropped by 33 percent. The continued talk of bankruptcy and the issue of what happens to a vehicle’s warranty if the car maker is in bankruptcy isn’t helping either company.
“There is nothing to stop the slide in intentions for those on the downside of this survey,” said CNW in a monthly research note on the car market. “But the decisions to cut back on advertising haven’t helped Chrysler or GM. Nor has the talk of bankruptcy, which continues to haunt those brands.”
While the survey holds bad news for Chrysler and GM, it does contain some good news for several other automakers. Ford Motor Company’s share of people that say Ford is their primary choice jumped 12 percent. Honda Motor Co. saw a similar rise in its share, it’s up 13 percent.
The staggering news comes from Hyundai and Kia which both showed incredible jumps. Hyundai is up 59 percent and Kia is up almost 50 percent. This comes along with both brands boosting U.S. sales with the overall market falling 39.4 percent.
“Hyundai and Kia show staggering increases in future consideration. While that may be considered distortion because they are starting with a low base market share, it is worthy of consideration considering how well both brands have been doing in the past rough months,” said CNW. In 2008, both Hyundai and Kia combined had a U.S. market share of just over 5 percent.
Part of the reason for Hyundai’s boosted sales may be due to its new program that allows customers to return a car within a year if the customer loses a job. GM has said it’s studying the Hyundai offer and is considering offering a similar program. AutoNation Inc., the biggest U.S. auto retailer, said that it would begin offering car buyers a guarantee program that would cover up to six months of payments for consumers who lose their jobs.
The CNW study was based on over 40,000 responses from consumers who say they intend to purchase a new vehicle. The study was conducted in January and February, two months where Chrysler’s sales dropped by 49.1 percent and GM’s plummeted by 51.1 percent from year-earlier levels.
Source: Automotive News