Fuel mileage picks up
New J.D. Power buyer study shows it gaining in favour with new-car shoppers

Fuel consumption is once again becoming an important factor in deciding which new vehicle to purchase, according to the recent J.D. Power and Associates 2003 Escaped Shopper Study. Gas mileage is now fifth on the list of reasons new-vehicle buyers reject one model over another. That's up eight places from 13th in '02.

The 2003 study is based on responses from over 32,000 new-vehicle owners.

Concerns over events in the Middle East, high gas prices and a growing trend toward larger and more powerful engines are given as reasons by 15 per cent of new-vehicle buyers citing fuel mileage as a reason for rejecting a vehicle they once considered buying.

The study, which examines the reasons new-vehicle shoppers reject vehicles they consider, finds that shoppers are most concerned with price-related factors, making them likely to purchase the least expensive model on their consideration list.

"Brands such as Hyundai, Kia, Suzuki and Mitsubishi are rarely considered exclusively. However, they are able to maintain high closing ratios when cross-shopped against other makes," said Chris Denove, a partner at California-based J.D. Power. "Such brands tend to place a greater emphasis on competitive pricing and value, and that is one of the strongest lures in the market."

Incentives continue to play a significant role in the decision to purchase or reject vehicles. Among all vehicles rejected, 16 per cent are rejected for lack of sufficient rebates/incentives while 14 per cent don't make the cut because they don't offer sufficiently attractive financing incentives. Domestic manufacturers appear to be satisfying customers with incentive packages. The percentage of domestic vehicles rejected for lack of financing incentives has dropped from 15 per cent in 2001 to 12 per cent in 2003.

"Many manufacturers that have ratcheted up their incentive marketing dollars to combat a down economy have found themselves in an incentive spiral that has proven difficult to exit," said Denove. "Consumers are likely to expect incentives such as low-interest financing, particularly from domestic manufacturers, for years to come."

The top 10 reasons reported for rejecting particular models were:

Those cars least often rejected by the study's respondents were led by Audi's A4/S4, the Lexus ES 300, Mazda6, Volkswagen New Beetle and Volvo's S60. When it came to trucks, Chevrolet's Venture, the Chrysler Town & Country, Honda Odyssey, Toyota Sienna and Volvo XC90 were viewed favourably.