Big 3 Employee DiscountsUniversity of Michigan's American Customer Satisfaction Index was just released. The survey rates automakers based on owner satisfaction. Owners are asked about their satisfaction and how their satisfaction level compares to their expectations. Toyota took the top spot with a score of 87 out of 100. U-M professor, Claes Fornell, who compiles the survey, believes that Detroit shoud invest more on quality improvements and less on incentives. I do not entirely agree. Ford, Chrysler, and GM are already making strides in quality improvement. Not to mention that next year Ford and GM are both trying to realign some of their car prices to reduce the need for incentives. I agree with Fornell that they both need to take a lesson from Hyundai, but tying incentives to quality does not make sense. The Big 3 have more ground to gain in public perception, because they are catching up in real world quality. While reinvesting what is spent on incentives may rapidly improve their vehicles, the investment may not pay off for years. The best tactic would be to reduce prices to better match their competition and increase their warranty terms to help any negative mechanical quality perceptions. The investment in the warranty increase, 10-year/100,000-miles sounds great, could also drive real mechanical improvements to ultimately reduce warranty costs. It's like learning to swim while drowning.



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