In years past, failing to receive the Consumer Reports “recommend” status was like a death knell in the automotive industry. But that appears to be changing, as evidenced by the increasing demand for the Honda Civic after it failed to receive the highly coveted commendation in August 2011.
Kelley blue Book analyst Alec Gutierrez says, “The overall competitive set from all manufacturers has become so good that, for some of us so-called experts in the industry, perhaps our expectations have gotten almost impossible to reach.”
The Volkswagen Passat also failed to make Consumer Reports’ list of recommended vehicles in October 2011. But demand for the model has increased from 4,893 during the first three quarters of 2011, to 83,662 during the same timeframe this year. In a September 18 statement, Volkswagen said the model had already surpassed its previous sales record.
In passing over the Passat, Consumer Reports said the model had “lost some of the sharpness of its predecessors.” In a subsequent post, the consumer products rating organization said, “The last-generation Passat was a better car overall, with agile handling. But a high price and so-so reliability, plus a lack of marketing, kept it off the radar for many buyers.”
October sales of Volkswagen and its Audi division are expected to increase by 26 percent compared with the same month last year. And some analysts are predicting that Toyota will post similar gains for the month.
According to nine analysts surveyed by Bloomberg, light-vehicle sales in the U.S. increased 12 percent this month, to 1.15 million units. Average estimates of 16 analysts sets annualized, seasonally adjusted, industrywide auto sales at 14.8 million units, down from 14.9 million units last month.
Gutierrez says consumers are also inclined to buy vehicles with less-than-stellar reviews out of loyalty to the brand. “Honda and Toyota buyers especially are fierce brand loyalists and that’s just what they stick with,” he said.
Chrysler Group LLC is another example of the disconnect that exists between quality scores and sales. The automaker has steadily increased its share of the U.S. market since 2010 despite unflattering reviews by J.D. Power & Associates and Consumer Reports.