If there's one thing we know for sure about the automotive industry in the U.S., it's that it is extremely competitive. In an industry where a fraction of a percentage point of market share can mean millions in won or lost profits, even the slightest advantage is important.
For investors, keeping up on potential competitive advantages between automakers like Ford Motor Company (NYSE:F), General Motors (NYSE:GM), and their Japanese peers, Toyota and Honda, is critical for picking successful investments in the automotive industry. For that reason, investors should take a glance at J.D. Power's recent 2015 Automotive Mobile Site Study. Here's what you need to know.
What's the big deal?
J.D. Power's mobile site study evaluates the websites of automotive manufacturers and third-party automotive websites for consumer satisfaction. The study included more than 12,000 evaluations of automotive mobile websites by shoppers who intended to purchase or lease a vehicle within the next two years, according to J.D. Power.
The study closely examined four key aspects of the websites -- information/content, navigation, appearance, and speed -- and calculated user satisfaction on a 1,000-point scale. Here's a look at the results, and some key takeaways.
Domestic brands had a solid showing: Six of the top 10 were domestic brands under the Ford, General Motors, or Fiat Chrysler Automobiles umbrella. On the flip side, the survey gives Volkswagen Group yet another thing to worry about after what's already been a month full of bad press because of its diesel emissions scandal, as its namesake brand came in dead last and its premium brand, Audi, was third from the bottom.
Obviously, a higher score is more desirable, but it's important for investors to know what those scores really mean to the brands.
Out of the 12,000-plus people surveyed, 81% of shoppers who were highly satisfied (a score of 901 or above) with their experience said they would "definitely" recommend the website to friends or family; only 3% of those with low satisfaction (scores of 500 or lower) would do the same. In addition to positive word-of-mouth for manufacturers higher on the list, 66% of highly satisfied consumers were more likely to test-drive a vehicle after visiting the website, compared to only 16% who posted low satisfaction. Thus, the automakers with multiple brands scoring above average gain significant advantages in retaining loyal consumers and having them spread the word about the brand.
Another interesting takeaway for investors is that shoppers using a phablet -- a smartphone with a screen of 5.5 inches or larger -- are more likely to access interactive content such as video than shoppers using a smaller device. The reason that matters is that the average satisfaction score among shoppers who used 13 or more website tools was 805, considerably higher than the 745 score among shoppers who used 12 or fewer. As phones continue to get larger, mobile websites will need to respond with more interactive and in-depth content for consumers.
Why does it matter?
That will essentially create a virtuous cycle for automakers: As their mobile websites become more in-depth and interactive, shoppers become more satisfied, which increases consumer loyalty and the chances of those consumers visiting a dealership for a test drive. Those are big wins in an industry where it's far more costly to lure consumers away from competing brands than to retain the loyal customers a brand has already won.
Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.