What Drives Brand Avoidance?

December 16, 2009

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WESTLAKE VILLAGE, Calif. — Although consumers are still averse to specific brands mostly due to styling, price and perceived reliability, one concern in particular has quickly become one of the major reasons for automaker avoidance.

According to the J.D. Power and Associates 2009 Avoider Study, 18 percent of new-vehicle buyers avoiding a particular brand said a reason for doing so is their concern for the future of the brand.

This reason — included in the study for the first time — was fourth on the list of most frequently mentioned causes for avoidance, behind the aforementioned factors.

Specifically, the five brands most often avoided because of concerns for their future are domestics, including Chrysler, Dodge, Hummer, Pontiac and Saturn, officials noted.

When the study was conducted, it had been revealed by General Motors that the "New GM" would not include Hummer, Pontiac and Saturn. Moreover, both Chrysler and GM were going through the bankruptcy proceedings at the time.

Interestingly enough, there was significantly less avoidance due to future viability concerns for Ford, Lincoln and Mercury.

Ford not undergoing bankruptcy or taking auto bailout money could be a primary reason for this, J.D. Power suggested.

"New-vehicle buyers want to know that if anything goes wrong with their vehicle in a year or two that the manufacturer will be there to back up their product," stated Kerri Wise, director of automotive research at J.D. Power.

"While Chrysler and GM struggled to gain the confidence of some consumers, Ford actually made strides in improving perceptions of its products and reducing year-over-year avoidance in the critical areas of quality and reliability," Wise added.

Additionally, officials said that when buyers avoid a brand due to worries of its future, they are also more apt than shoppers not sharing that sentiment to cite concerns with its reliability, rapid depreciation, the reputation of the OEM and poor quality as reasons for avoiding the brand.

"For some American manufacturers, quality and reliability performance in the past has led to a poor perception among consumers and, ultimately, to overall avoidance of those brands," Wise pointed out.

"These perceptions are slow to change among consumers, so domestic brands must continue to focus on quality improvement and make sure their efforts are communicated to consumers," she added.

Continuing on, considering the shaky stance of the American economy, import brands have been somewhat hurt in terms of brand avoidance.

Granted, imports have seen a 3-percentage point hike in market so far in 2009, compared to the same period a year ago. However, J.D. Power said domestic buyers who avoid imports have taken a more pervasive "Buy American" attitude than they did in 2008.

In fact, almost three-fifths of Big 3 purchasers averse to buying foreign-brand models mentioned that a reason for doing so was that they "didn't want a foreign/import vehicle." Conversely, just 46 percent said the same a year ago.

"Several import models are actually produced in the U.S. but are still avoided due to foreign origin," noted Wise.

"To combat this growing sentiment against import vehicles, import brands that produce vehicles in the U.S. must continue to promote and emphasize their domestic ties, as well as other product advantages," she continued.

Next, the study looked at consideration for 19 all-new models. In doing so, J.D. Power discovered that lack of consumer awareness is a major driver for low consideration rates.

Officials pointed out that the debuts of such models as the Chevrolet Camaro and Dodge Challenger, thanks to their well-known histories and "consumer buzz," were successful in generating awareness.

However, there are some models that haven't been able to create that same kind of awareness.

"Creating awareness and an identity in the crowded automotive market takes both time and money," Wise commented. "A new-vehicle buyer who purchases in a segment in which an all-new model competes and doesn't even know that the new model exists presents an obvious concern for future sales of that model."

Moving on, J.D. Power pointed that styling often comes into play in terms of building consideration for newly launched units. Analysts indicated that the "universally desired" models — vehicles whose style attracts some consumers but isn't the reason others are deterred — included the Audi Q5, Challenger, Kia Soul and Pontiac G3.

However, some models — like the Ford Flex and Nissan Cube — can be what J.D. Power called "polarizing." In other words, the same style that allures some shoppers may be the very reason why other shoppers stay away.

"Many manufacturers would like their vehicles to be universally appealing, but ‘love it or hate it' models have the potential to create just as much buzz and move as quickly off the lot," Wise indicated.

"It is important for launch models to hit the mark when it comes to styling, as a hot model launch may be a game changer for a brand overall," she concluded.

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