Big 3 not benefiting from troubles at foreign brands

Correction: This story has been updated to correct a mischaracterization of data about shopping habits at Edmunds.com. Comparisons of cross-shopping between brands represented queries of shoppers who were considering buying Volkswagens against other brands, not shoppers who currently own Volkswagens and were looking at other brands.​

Washington — Recalls and emissions problems at foreign-owned auto brands such as Volkswagen and Mitsubishi have roiled the nation’s auto industry, but analysts say there is little evidence buyers are turning toward cars made by Detroit carmakers.

Cross-searches between Volkswagen and brands such as Ford and Chevrolet on the car-shopping website Edmunds.com changed little between August 2015 — the month before the German auto manufacturer admitted it had rigged its diesel cars to cheat on government emissions testing — and April, according to researchers at the company.

Twenty-six percent of the site’s visitors who searched for information about Volkswagen cars also looked up information about Ford brands in August, compared to nearly 25 percent in April.

Similarly, about 15 percent of Edmunds.com visitors who searched for Volkswagens also looked up Chevrolet vehicles in August, while the website found that 17 percent made similar searches in April. “There wasn’t much difference in cross-shopped brands before and after the scandal hit in September,” said Aaron Lewis, senior communication manager for Edmunds.com.

The auto industry has been rocked in recent months by revelations that Volkswagen cheated federal pollution standards by rigging cars to activate pollution-reducing software only during testing, and Mitsubishi falsified data on gas mileage test results.

Additionally, a massive recall of defective air bag inflators that were made by Japanese supplier Takata has recently been doubled to include approximately 35 million to 40 million more of the faulty parts, which has impacted about 17 brands. Honda, Fiat Chrysler and Toyota have had the most air bags recalled.

Volkswagen’s market share has dropped since the scandal hit. In the first four months of 2015, VW captured 3.1 percent of U.S. market, according to Autodata Corp. That had dropped to 2.8 percent in the same period of 2016. Mitsubishi’s share of the market stayed steady at 0.6 percent.

Ford and Fiat Chrysler picked up market share in the first four months of 2016: Ford had 15.6 percent of the market, compared to 15 percent during the same period a year ago. And Fiat Chrysler increased its share to 13.4 percent from 12.8 percent. GM’s share fell to 16.9 percent from 17.6 percent.

Analysts said the numbers paint a picture of relatively stable sales in the U.S. auto industry, despite the rash of recalls and emissions problems that have cropped up among multiple brands. And Brenna Robinson, a spokeswoman for car-shopping website Kelley Blue Book, said Volkswagen’s market share was declining even before its diesel scandal, in part because it lineup skews heavily toward cars at a time when the market is demanding SUVs and crossovers.

Edmunds.com’s Lewis said the impact of the Takata scandal is still being sorted out since it was expanded so recently. In fact, Toyota appears to be gaining customer interest. “The only brand that sort of stands out to us is Toyota, which closed in on Ford as the No. 2 cross-shopped brand,” he said.

Lateral moves

Researchers at Kelley Blue Book said they have mostly seen lateral moves between similar automakers like Mitsubishi and Nissan, based on their analysis of brand searches on their website.

Joanna Pinkham of Kelley Blue Book said the website has seen a jump in cross-shopping from Volkswagen toward Subaru (increased 17 percent from September 2015 through April) and Nissan (increased 15 percent from September through April). Those looking at Mitsubishis increasingly cross-shopped Nissan (up 14 percent from September through April).

“Looking at cross-shopping, we don’t see any significant jump toward domestic brands by Volkswagen or Mitsubishi shoppers,” Pinkham said. “Ford continues to be in the top five most cross-shopped brands, and Chevrolet remains in the top 10,” Pinkham said.

“This is not surprising, as these two OEMs (Nissan and Subaru) have not been associated with Takata recalls like Toyota and Honda have,” she concluded. “So for Volkswagen and Mitsubishi owners who are trading in, again, no significant jump toward the domestics.”

Jim Gillette, an independent auto analyst based in Grand Rapids, said it would take persistent delays in repairs for Takata air bags for a pronounced change in the buying habits of U.S. drivers to take shape. “The buying public, for the most part, identifies more with particular brands than with foreign vs. American,” he said.

“I don’t believe the issue is one of purchasing ‘foreign’ vs. ‘Detroit Three’ brands. After all, Chrysler is now owned by Fiat, the Italian maker.”

Gillette added, “Takata’s air bag issue is different only in its magnitude. Certainly the General Motors ignition switch fiasco killed far more people than exploding air bag canisters and we have not seen any evidence that any consumers moved to other brands specifically for that reason, although quality problems over a period of decades took their toll on GM’s brand loyalty.”

Automakers who are marketing imports to U.S. customers have denied that the Takata air bag issue will reflect poorly on them.

“The premise that Takata air bag inflator recalls affecting nearly every brand in the industry would uniquely affect the reputation of any particular brand is simply not true,” Honda U.S. spokesman Chris Martin said in an email.

“With over 22 automotive brands’ vehicles included in Takata air bag inflator recalls, including each of the ‘Big 3’ U.S. domestic automakers along with Asian and European nameplates, we believe that consumers understand that it is an industry issue rather than a ‘foreign autos’ issue.”

U.S. automakers, meanwhile, are also wary of taking a victory lap because of the air bag and emissions problems that have plagued their competitors based in other countries.

‘Smart products’ credited

“The growth at GM/Chevrolet stretches back to last April,” said Jim Cain, a business spokesman for Chevrolet. “It has more to do with smart products we’ve made in the hottest segments like trucks and SUVs.”

Cain said the Chevrolet Malibu sedan has gained “pretty significant market share” in recent months in markets along the East and West coasts. But “any impact of distressed competitors is probably at the margins,” he said.

U.S. automakers have also had problems with regulatory violations in recent months. GM reported to the Environmental Protection Agency earlier this month that it discovered about 170,000 model-year 2016 SUVs were shipped with window stickers that overstated estimated fuel economy by 1 to 2 miles per gallon. The company will compensate 130,000 retail customers.

klaing@detroitnews.com

(202) 662-8735

Twitter: @Keith_Laing