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Car Buyers Believe They're Getting More for Their Money

Survey: No-interest financing, better quality have led to heightened perception. Toyota wins in six of 17 categories.

September 09, 2002|TERRIL YUE JONES | TIMES STAFF WRITER

DETROIT — Incentives by auto makers after last September's terrorist attacks and higher-quality cars and trucks have elevated buyers' perception of their vehicles' value, according to an annual survey by an automotive consulting group to be released today.

Toyota Motor Corp. had the most winners of the 17 vehicle categories with six, and Korean brands had three, continuing their improvement in the so-called total value index calculated by San Diego-based Strategic Vision.

"The Korean brands gained a firm foothold," the study says. "Backed by a strong warranty and improved products, Hyundai and Kia offer their owners real value, not just cheap pricing."

The index takes into account overall quality and the purchasing/ownership experience and adds factors that can be measured such as incentives, affordability, standard equipment and warranties, as well as "perceived resale values, perception of good durability and reliability, fuel economy and economy of operation," said Strategic Vision Vice President Dan Gorrell.

"Value has increased because of better product and immediate pricing gains from things like zero-percent financing and other things manufacturers have rushed to provide after Sept 11."

Many auto makers introduced interest-free loans last September to boost sales, which plummeted after the terrorist attacks.

The free financing, which lowered costs to consumers by thousands of dollars per vehicle, and other deals such as longer war- ranties and early lease cancellations gave a strong boost to auto sales.

The Big Three in particular have continued interest-free loans at various times in the last year and are engaged in another round of such financing.

The Mini Cooper, which is made by BMW and went on the market this year, came in with the highest overall score.

"A vehicle from the BMW family starting under $20,000 gets people really excited," Gorrell said.

It was followed by the Volkswagen New Beetle and the Lexus LS 430 luxury sedan.

Despite the deep and wide-ranging incentives, American brands did not come in at the top of any category except that of larger cars, which was made up only of U.S. brands. The Oldsmobile Aurora took first place in the category. General Motors Corp. is discontinuing the Oldsmobile brand because of poor sales.

Toyota dominated the truck categories, taking top honors among medium, large and luxury sport utility vehicles as well as among compact and full-size pickup trucks.

Toyota also won in the luxury car category with one of its Lexus models.

A surprise came in the minivan category, won by the Kia Sedona, a relatively new entry to the segment, where minivans by Honda Motor Co. and Chrysler Corp. generally top the quality and popularity ratings.

"For the Sedona it's not resale value but the overall experience, which is boosted by its warranty," Gorrell said, noting Kia's 10-year, 100,000-mile warranty. "So it got its position through a variety of factors. You pull the warranty plug, and a lot of that equation falls away."

The sense of getting more for one's money is a key factor in the research firm's total value index study, first conducted in 1996.

"When consumers feel they got their money's worth, it's about a lot more than price," Strategic Vision President Darrel Edwards said in the study.

"They feel they're winners when they get a lot for their money, so the quality of the ownership experience has to be calculated into the value equation."

Strategic Vision surveyed more than 76,000 purchasers who bought their cars and trucks between October 2001 and March 2002 and have owned their vehicles for 90 days or more.

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And the 2002 Winners Are ...

A study by Strategic Vision found that incentives offered by auto makers over the last 12 months have helped boost new owners' perception of the value of their cars. The winners for the 2002 model year are:

Small Car: Honda Insight

Compact Car: Hyundai Sonata

Mid-Size Car: Volkswagen Passat

Larger Car: Oldsmobile Aurora

Small Specialty Car, less than $25,000: BMW Mini Cooper

Mid-Specialty Car: Honda Accord Coupe

Near-Luxury Car: Mercedes Benz C-Class

Luxury Car: Lexus LS 430

Convertible, less than $30,000: Mazda Miata

Convertible, more than $30,000: Audi TT

Minivan: Kia Sedona

Small SUV: Honda CR-V / Hyundai Santa Fe (tie)

Mid-Size SUV: Toyota 4Runner

Large SUV: Toyota Sequoia

Luxury SUV: Lexus RX 300

Compact Pickup Truck: Toyota Tacoma

Full-Size Pickup Truck: Toyota Tundra

Source: Strategic Vision

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