Consumers still don’t support financial assistance for automotive industry

According to a survey by Synovate Motoresearch, the majority of Americans were opposed to financial assistance from the United States government for domestic automotive manufacturers. Despite this, almost 30 percent claimed that they will likely consider a domestic vehicle for their next new vehicle purchase.

The survey began on December 5, several days before President Bush extended limited aid to General Motors and Chrysler on December 19, found that 64 percent of Americans were not in favor of the government providing financial assistance to the Detroit Three, despite the Congressional hearings. Of those who thought assistance should be given, 27 percent said all of the big three should receive help, while 6 percent cited only General Motors and 4 percent said just Ford. Chrysler was listed as the manufacturer that least deserved financial assistance, at only 3 percent.

Scott Miller, CEO for Synovate Motoresearch said, “We’re seeing consumer opposition to financial assistance for the domestic automotive manufacturers continuing to go up. It’s apparent that the hearings and all the attention around this hasn’t helped the situation as consumers still aren’t sure if this is the right direction.”

When reviewing the results by age, it’s clear that younger respondents overall were more supportive of the government providing financial help to the manufacturers. Survey respondents based in the southern United States were least likely to support financial assistance while those in the Midwest were more in favor of it. Those with lower household incomes were also more supportive of government assistance.

Interestingly, while consideration of domestic brands was strongest for the youngest and oldest consumers, support for import brands was more balanced across age groups.

Even though brand support is weakening, consumers agreed that many of them will consider the Detroit Three for their next new vehicle purchase. Toyota ranked highest at 36 percent, followed by GM and Honda at 29 percent each, and Ford at 23 percent. Chrysler and Nissan ranked a bit lower at 17 percent each while Volkswagen, Hyundai and BMW were selected by 10 percent or less of respondents.

Among domestic brands, Americans said they would most consider General Motors (29 percent), followed by Ford (23 percent) and Chrysler (17 percent). Eighteen percent of respondents said that they would not consider a domestic brand at all.

Not surprisingly, Toyota and Honda were ranked as the top two import brands, at 36 percent and 29 percent respectively, followed by Nissan at 17 percent.

“The real question here is what’s going to happen next?” said Miller. “I think people are going to be much more wary about buying domestic vehicles overall. When shopping for a new vehicle they’re now going to wonder about the future financial stability of the manufacturer, if there will be a warranty, if car parts and service will be available down the road. The current environment unfortunately will lead to a serious erosion of the brand. These manufacturers will have big challenges when it comes to marketing the vehicles, not to mention the impact of the residual values, which will make it more expensive to buy cars to begin with.”

The survey was conducted with 1,000 consumers aged 18 and over in the United States, using Synovate eNation, Synovate’s national omnibus research service.