The perceived quality gap between domestic and import vehicles is disappearing in consumers' minds.
That's the conclusion of a recent nationwide survey as well as analysts who track used-vehicle prices. If that shift in consumer attitudes continues, it will affect industry sales and pricing for years to come.
Better vehicles from General Motors Co. and Ford Motor Co., coupled with the recalls by Toyota Motor Sales U.S.A. and American Honda Motor Co., have narrowed the perceived quality gap between domestic and import vehicles, says Alec Gutierrez, vehicle valuation lead analyst at Kelley Blue Book.
"There was a perception that the imports are the best, bar none, and the domestics can't compete," Gutierrez says. But vehicles such as the Chevrolet Malibu, Cadillac CTS and Ford Taurus and Fusion are "starting to chip away" at the "negative stigma" of owning a domestic vehicle, he says.
In March, wholesale prices of many late-model used domestic vehicles appreciated at a faster clip than their import rivals.
Although imports still commanded a premium over domestics last month, 2006-08 model domestics appreciated 3 percent on average from February, nearly double the increase for 2006-08 model imports, says Gutierrez.
Those improvements already are lifting the residual-value forecasts of some Detroit 3 vehicles, says Joe Spina, senior analyst at Edmunds.com. That could allow automakers to offer more attractive lease deals. Higher residual values typically mean lower monthly lease payments.
Edmunds.com set its five-year residual forecast for the 2010 Taurus LTD 10 percentage points higher than the five-year residual for the 2009 model. It set the 2010 Buick Lacrosse CXL residual 11 percentage points higher than the residual for the 2009 model.
Domestic automakers "are truly making better cars," Spina says. "We believe that for a lot of domestic cars, peoples' perception will catch up with reality."
But Spina says prices of used domestics are moving upward at a faster pace because they have room to grow and imports do not. He says new-car incentives have brought prices for new Honda Accords and Civics and Toyota Camrys and Corollas close to those for late-model used ones. Used-car shoppers are starting check out new-car showrooms.
"The used Japanese vehicles can't go much higher," Spina says. "The domestics have room to grow, and people are beginning to understand they are good vehicles."
Jonathan Banks, senior director of editorial and data services at NADA Used Car Guide, sees the same change. "People are saying, 'I'm buying this Fusion because it's a more practical choice,' " he says. "Now I can make that practical choice and feel confident about it because the quality is behind it."
