Best and worst car brands

Holden and Mitsubishi came equal 11th and Ford came 12th out of 13 makers ranked in a Melbourne Business School survey released last week. Toyota was the top ranked local maker, at sixth.

The results painted "a very gloomy picture of the future of the local industry" said the survey's director, Melbourne Business School associate professor Mark Ritson.

He said local brands were being crippled by negative word-of-mouth and lagged far behind the prestige of German and Japanese makers. "The picture is of declining brands that are no longer generating enthusiasm in the majority of their customers," he said.

The survey, which measured how many owners would recommend the car they owned to friends, had proven to be an accurate predictor of future business performance, Mr Ritson said.

"By dividing people into brand detractors and promoters it reveals which brands have potential to grow. The major lesson that comes out is that if you allow a significant number of brand detractors to develop, your brand is in trouble," he said.

"When the majority of customers for a business are either passive or detractors it means the business gets very little customer advocacy, repeat sales or increased growth over the long term. The reason is because detractors spread more than 80 per cent of the word-of-mouth on a brand."

The survey found Mitsubishi, Holden and Ford all had more brand detractors than promoters, while Toyota was narrowly positive. "Based on our results, the conclusion has to be that Toyota has the best long-term growth prospects — indeed it is the only Australian maker with positive long-term prospects," Mr Ritson said.

The survey asked 2000 people one question: "How likely is it that you would recommend this company to a friend or colleague?" Subtracting negative from positive responses produced overall net promoter scores.

GM Holden spokesman Jason Laird said Holden scored consistently strongly in surveys among potential buyers. "Our intention-to-purchase results are consistently higher than for the overall market and that is borne out in sales data," he said. "While it would be nice to top every survey that comes out, the crux of the matter is we have had the country's top-selling car for the past decade."

Ford spokeswoman Sinead McAlary said the company would adopt the net promoter method for its own internal dealer surveys next year. "While we don't necessarily agree with the results of the survey, we do recognise a need to know more about our customers and improve the rate of referrals," she said.

The method had been used in the US for several years and had been adopted in British Ford dealerships this year.

Mitsubishi spokesman Kevin Taylor said the company accepted the need to continually improve customer service. "There's more we can do and it's our intention to increase the amount of customer interaction with our new vehicle owners in a program that we'll be starting next year," he said.

Mr Ritson said makers who responded to brand crises with conventional marketing tactics would not change long-term negative perceptions and could worsen their situation.

"There's a pressure in the automotive sector to discount, rebate and bundle, which is seen as offering more value," he said. "The lesson of this research is that such a tactic creates bad profits. It might shore up cashflow, but it attracts customers to a brand who buy because it's cheap. But when it doesn't meet their expectations, they end up spreading negative word of mouth about it, further hurting the brand."

The survey did not establish how old respondents' cars were, whether they were bought new or used, whether they were dealer-serviced or whether they were privately owned or company vehicles.

But Mr Ritson defended the survey method.

"This is frustrating research because it tells us nothing about why brands are going in certain directions. But it predicts with extreme rigour what to expect for brands, based on their scores," he said.

Net promoter scores collected overseas appeared to show a remarkably clear correlation with business growth, he said.

Leading the table were the German makers. BMW was top with a net promoter score of 59 per cent, Audi came second on 47 per cent, Volkswagen third on 45 per cent and Mercedes-Benz fourth on 39 per cent.

Results from owners of Lexus, Volvo and several other brands were not included in the results due to small sample sizes.

BRAND SATISFACTION RATINGS BY AUSTRALIANS

1. BMW: 59 per cent

2. Volkswagen: 47 per cent

3. Audi: 45 per cent

4. Mercedes: 39 per cent

5. Subaru: 37 per cent

6. Toyota: 13 per cent

7. Mazda: 12 per cent

8. Honda: 2 per cent

9. Nissan: -5 per cent

10. Hyundai: -9 per cent

11. Mitsubishi: -16 per cent

11. Holden: -16 per cent

12. Ford: -25 per cent

13. Saab: -47 per cent

Source: Melbourne Business School