Car Brands with the Worst Dealers

The success of car brands depends on quality and advertising — at least, that is what most people think. But it may be that these cars are only as good as the dealerships selling them.

Car sales consulting firm Pied Piper used mystery shoppers — people pretending to buy a car — to shop for a vehicle and then report back on their experiences. The company’s Prospect Satisfaction Index (PSI) measured which manufacturer dealerships employed sales tactics that result in better sales. Auto brands Scion, Mitsubishi and Mazda had the highest percentage of dealerships that rated poorly in the index.

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Certain sales practices separated the most successful dealers. Unsuccessful dealers were much less likely to conduct a vehicle walk-around with the client. Brands with poor PSI scores, including Fiat and Mitsubishi, only did this about 70% of the time, compared with closer to 90% for the best-rated brands.

Bringing potential customers to a desk to go over specifics was also important, according to Pied Piper. Ford, Nissan and Toyota — all brands with high-rated dealerships — did this close to 90% of the time. Meanwhile, Lincoln, Mitsubishi and Scion, all which had among the worst dealerships, did this closer to 60% of the time.

According to Pied Piper founder Fran O’Hagan, this study has been successful at identifying dealership practices that encourage sales. “What we found over the past seven years is the brands at the top of the list tend to sell more units per dealership.” O’Hagan noted that dealerships in the top of PSI scores sell 16% more vehicles than those in the bottom.

Indeed, a review of the brands with the worst dealerships reflects relatively poor numbers. Sales of the five worst-rated brands in the first half of 2013 either declined or grew slower than the industry average. There were some exceptions: Sales of RAM, which had the seventh worst rated dealerships, grew by 23%.

Because so many factors contribute to a brand’s success, sales and quality dealerships do not necessarily go hand-in-hand, O’Hagan noted. “At the dealership level, there are a lot of things you can’t control in the short term. Location is one of them. In the auto industry, three quarters of what a dealership sells depends on where they’re located. In other words, if you have a Lexus deal in Des Moines, Iowa, and another one in Long Beach, California, the one in Long Beach is going to outsell the one in Des Moines. Period.” O’Hagan also mentioned that brand quality and the dealership’s facility also impact sales.

Another measure of the effectiveness of these dealerships is the amount of time the average car spends on the lot before being sold, known as days to turn. In June, the average days to turn for a vehicle sold in the United States was 62 days. Cars in eight of the brands with the worst dealerships spent at least that long. This includes Mitsubishi, whose average vehicle spent 99 days on the lot before being sold, the second longest of any car brand.

24/7 Wall St. identified the worst car dealerships in the country based on Pied Piper’s Prospect Satisfaction Index. The index considered the dealership experience of 5,200 mystery shoppers who visited dealerships across the United States between July 2012 and June 2013. 24/7 Wall St. reviewed customer satisfaction surveys from both J.D. Power and Associates and the American Consumer Satisfaction Index. We also considered J.D. Power’s Initial Quality Survey. The average days to turn was for June 2o13.

These are America’s worst car dealerships.

10. Chevrolet
> PSI score: 98
> YTD sales growth: 5.6%
> Days to turn: 83
> Market share: 13.0% (2nd highest)

Chevrolet cars sold in June sat on the lot for an average of 83 days, higher than all but six other makes. Nevertheless, consumers have not expressed too many complaints about the cars. The ACSI satisfaction placed Chevrolet in line with the automotive industry average. Meanwhile, J.D. Power placed Chevrolet among the top five mass market vehicles in terms of customer satisfaction. Sales of many of Chevrolet’s top models have improved considerably since 2012. For instance, Chevrolet has sold 24.7% more Silverados in the first six months of 2013 compared to the same time in 2012.

9. Land Rover
> PSI score: 98
> YTD sales growth: 9.5%
> Days to turn: N/A
> Market share: 0.3% (7th lowest)

Among car brands, Land Rover has one of the smaller market shares at just 0.3%. Not only does the make command a small portion of the market, but demand may be waning as well. In June, Land Rover sales fell by 3.7% from the year before, while U.S. cars sales rose more than 9%. Limiting their appeal, Land Rovers rated below-average in both initial quality and sales satisfaction than the majority of other luxury brands.

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8. Nissan
> PSI score: 98
> YTD sales growth: 9.4%
> Days to turn: 68
> Market share: 7.3% (5th highest)

Nissan sales rose 9.4% in the first six months of 2013, compared to the same time in 2012, above the 7.7% growth across the country. Sales of the Altima, Nissan’s best-selling car, are up 6.8% from the same time in 2012. J.D. Power placed Nissan below the market average for sales satisfaction. In addition, Nissan ranked fourth from the bottom for J.D. Power’s initial quality assessment. Nissans had 142 problems for every 100 cars sold during their first 90 days off the lot, compared to 113 problems across the industry.

7. RAM
> PSI score: 98
> YTD sales growth: 23%
> Days to turn: 80
> Market share: 2.2% (13th highest)

Driven almost entirely by sales of the RAM pickup, one of the nation’s best-selling cars, RAM’s sales were up almost 23% in the first six months of year. Still, many customers had problems with their RAMs, and the brand ranks among the nation’s worst in initial quality. This means that very soon after buying their cars, owners encountered design-related, difficult-to-fix problems. It took an average of 80 days to sell a RAM, longer than the industry average for most cars.

6. Fiat
> PSI score: 96
> YTD sales growth: 4%
> Days to turn: 87
> Market share: 0.3% (6th lowest)

The Harvard Business Review last year touted Fiat’s ability to build a small, independent dealer network as a potential positive for the brand’s future expansion. However, there are few signs that the Italian brand could grow its market share via the limited dealer network. Sales in the first half of 2013 were up just 4% from the year before, while across the industry sales were up 7.7%. Just one car brand, Scion, ranked worse in initial quality than Fiat, which had 154 problems in the first 90 days for every 100 vehicles sold, according to J.D. Power. These sorts of problems likely make selling the brand more difficult for dealers — it took an average of 87 days to turn over a Fiat, versus 62 days for the auto industry on average.

5. Lincoln
> PSI score: 95
> YTD sales growth: -8.8%
> Days to turn: 65
> Market share: 0.5% (12th lowest)

Lincoln had the fourth highest satisfaction in the J.D. Power survey. For luxury vehicles. Lincoln was also in line with the industry average in the initial quality study, with 113 problems in the first 90 days per 100 vehicles sold. However, Lincoln was at the top of the ACSI, up several places from the previous year. To its credit, the average time on lot for Lincolns sold in June was 65 days, only slightly longer than the industry average.

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4. Chrysler
> PSI score: 94
> YTD sales growth: -2%
> Days to turn: 96
> Market share: 2.1% (14th highest)

As sales for carmakers have risen across the industry, Chrysler has been notably absent from the party. In the first six months of the year, sales of Chrysler Group’s nameplate brand have fallen by 2%. The brand, and its dealers, have been unable to forge a productive relationship with car buyers. It takes a dealer an average of 96 days to move a Chrysler off the lot, one of the longest periods of time in America, indicating the brand has trouble selling its cars. With an ACSI score of 78, no car brand was rated worse for consumer satisfaction in 2012.

3. Mazda
> PSI score: 94
> YTD sales growth: 0.8%
> Days to turn: 69
> Market share: 1.9% (16th highest)

Consumers reported 125 problems for every 100 Mazdas sold during the first 90 days, higher than the 113 problems average across the industry. Year to date, Mazda sales grew by just 0.8%, compared to an increase of 7.7% across the industry. The lagging growth was likely due at least in part to the end of domestic Mazda production. Import car sales were up 13.6%, while import truck sales were up 39.5%.

2. Mitsubishi
> PSI score: 89
> YTD sales growth: -7.3%
> Days to turn: 99
> Market share: 0.4% (8th lowest)

On average, it took 99 days for dealers to sell a Mitsubishi, more than any other car brand except for Acura. Mitsubishi’s stature in America has faded in recent years, and while dealers remain confident that the brand will not exit the United States as Suzuki did, the make is a shell of its former self. Sales of the manufacturer were down by more than 7% in the first six months of 2013, with its share of the market down to 0.4%. Based on figures published by J.D. Power, the carmaker is also among the worst in initial satisfaction, with 148 problems for every 100 cars sold within the first 90 days of ownership.

1. Scion
> PSI score: 88
> YTD sales growth: -0.3%
> Days to turn: 61
> Market share: 0.4% (11th lowest)

No dealers have a worse record than Scion, according to Pied Piper. Scions also had 161 problems per 100 vehicles sold in the first 90 days off the lot, ranking dead last of all vehicle makes in the J.D. Power Initial Quality Survey. J.D. Power also ranked Scion below the industry average in terms of sales satisfaction. Despite all this, dealers manage to sell Scions at an average of 61 days, in line with industry average.

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