Results of the Brand Perception of Quality study orchestrated by ALG showed how Honda and Mercedes-Benz edged out their import competitors to deliver what consumers perceive to be the highest quality vehicles.

ALG, the analytics division of TrueCar, indicated that Honda received the highest ratings among mainstream brands, followed by Toyota and Volkswagen.

Mercedes-Benz earned the highest ratings among premium brands, followed by Lexus and BMW.

ALG highlighted that European automakers netted six of the top seven premium brand spots. The mix was a bit more varied among mainstream brands. While three of the top four spots were held by Japanese automakers (Honda, Toyota, Subaru), domestic brands GMC, Ford and Buick were all among the next tier.

“When consumers buy a car, brand perception directly impacts how quickly the vehicle will depreciate,” said Larry Dominique, president of ALG and executive vice president at TrueCar. “Many consumers lack any real experience with the brand, so there is often a gulf between perception and reality. When deciding on a car purchase, consumers need to consider more than just build quality – they need to consider how the brand is perceived in the marketplace.”

Among college-educated respondents, Volkswagen and Subaru saw lifts in their favorability. Among Millennials, Jeep leapfrogged into the top three brands.

“Millennials value transparency and authenticity, and Jeep positions itself as authentically rugged,” Dominique said.

Brands with less familiarity among consumers tend to be perceived less favorably. Alfa Romeo, set to return to the U.S. by 2015, is a good example of a brand that will need to establish greater awareness before it can change perception, ALG suggested.

ALG surveyed 30,000 recent buyers in conjunction with Strategic Vision’s New Vehicle Experience Survey (NVES) and asked them to rate the quality of all brands. The calculated index removes the rating for the brand that the consumer purchased. BPQ rankings are indexed on a 100-point scale based on survey respondents’ qualitative scores, ranking aspects of vehicle brands.

More Mainstream Brand Analysis

As in previous reports, ALG pointed out that Honda and Toyota still comprise the top tier of quality perceptions for the mainstream sector.

“Toyota’s widely reported unintended acceleration issues resulted in a short term drop in perception of quality, but quickly rebounded based on consumer good will, pulling nearly even with Honda again,” ALG said. “The gap between the top tier and the rest of the field has narrowed in that time, and buyers are clearly getting the message that overall quality levels have much more parity than ever before.”

Analysts noted that Volkswagen’s position at the top of the challengers is reinforced by its German roots.

“The education level of the respondent has a tremendous impact on their perception, as those respondents with a college-level education or higher rank VW third in terms of quality, while all others set the brand significantly lower,” ALG said.

“Clearly VW has been successful in cultivating their brand image among that niche of consumers,” the firm continued.

Meanwhile, analysts noticed that high school grads placed domestic brands such GMC, Chevrolet, Buick and Ford high compared with those survey participants who have some higher education.

“In fact, the former group puts all three GM brands above Toyota, with GMC above Honda, as well,” ALG said.

The survey showed that Hyundai — which has been a brand on the rise by most measures — ranked right in the middle.

“Hyundai’s brand perception made significant strides through 2011, but since that time its progress has plateaued,” analysts said. “This story is linked closely to consumers’ level of exposure to the brand.”

ALG mentioned that 2011 also happens to be the year when Hyundai’s share of the market peaked at just above 5 percent.

“And the gap between the opinion of owners and non-owners is larger for Hyundai than any other non-niche brand. Hyundai’s further improvement in perception could come from enticing more consumers to experience its vehicles and convincing its owners to spread the gospel,” analysts said.

ALG wrapped up its analysis of mainstream badges by touching on the “greater challenge” encountered by what the firm deemed to be the niche brands — smart, Mini and Scion.

“The general public’s lack of familiarity with them, especially among less educated and older buyers, puts a damper on its perceptions of their quality,” analysts said. “In fact, owner scores for the smart brand are more than twice those of non-owners, but with a fraction of a percentage point of market share, the brand will likely have difficulty improving its quality image.”

Additional Luxury Commentary

As mentioned previously, brands that aren’t as familiar to a wide swath of consumers struggled to post high scores in the survey.

“While many enthusiasts are familiar with the Alfa Romeo and Tesla brands, few consumers have actual experience with those vehicles,” ALG said. “Lincoln suffers a very similar bi-polar perception as Hyundai — owners are quite satisfied with the brand’s quality (ranking it second only to Porsche owners), while non-owners rank it near the bottom.

“Getting consumers to experience the ‘new’ Lincoln Motor Co. will be paramount for improving brand perception,” the firm added.

So why did Mercedes-Benz claim the top spot on the luxury side?

“Mercedes-Benz has emerged as a leader of a tightly grouped pack at the top tier of the sector. It’s clear that the established German luxury marques, along with Lexus, have a solid advantage in the battle for public perception,” analysts said.

ALG made one final point about what the luxury brand portion of the survey revealed.

“There is often a lag effect between perception and reality. Even a brand that addresses its quality challenges requires a long and vocal consumer messaging campaign to get buyers to forgive the past,” analysts said.

“That perception is compounded if a brand consistently fails to address quality issues the market will understand this as in the case of Land Rover,” they continued.

Since 2005, ALG noted that the brand has consistently been ranked lowest among luxury brands in both J.D. Power quality surveys, covering initial quality and vehicle dependability.

“However, brand desirability matters, as Land Rover proves that perception of quality is only one lever automakers can pull to generate robust sales,” analysts said.

As of last month, ALG indicated no brand had a lower days’ supply than Land Rover — at 23 days — and only Porsche has a higher average transaction price.

Brand Perception of Quality — Mainstream

Honda: 64.9
Toyota: 63.3
Volkswagen: 58.8
Subaru: 57.5
GMC: 57.4
Ford: 57.0
Buick: 56.8
Nissan: 56.0
Mazda: 55.7
Chevrolet: 54.4
Jeep: 54.2
Hyundai: 53.7
Average: 53.4
Mini: 53.1
Ram: 51.5
Chrysler: 50.3
Dodge: 50.1
Mitsubishi: 49.5
Fiat: 48.9
Scion: 48.5
Kia: 48.3
Suzuki: 45.1
smart: 40.4

Brand Perception of Quality — Luxury

Mercedes-Benz: 70.2
Lexus; 69.4
BMW: 68.7
Porsche: 68.1
Audi: 65.9
Maserati: 64.8
Infiniti: 64.7
Acura: 64.0
Average: 63.1
Cadillac: 62.6
Jaguar: 61.6
Volvo: 61.2
Lincoln: 60.9
Land Rover: 56.3
Tesla: 55.5
Alfa Romeo: 53.0