Automotive Manufacturers Taking Wrong Turns: Industry's Overall Corporate Reputation Rated 'Vulnerable,' Says New Study.

Business Editors/Automotive Writers

GREENWICH, Conn.--(BUSINESS WIRE)--Dec. 3, 2003

TNS/NFO WorldGroup Study Reveals Honda and Toyota Have Strongest

Reputation; Automotive Industry Can Raise Its Failing Grade by

Improving on Its "Quality" Messages

From the fast and the furious to plain failures - is the automotive industry running out of gas? According to a new study by TNS-NFO Automotive, a division of TNS/NFO WorldGroup, one of the world's leading providers of research-based marketing information and counsel, the automotive industry's reputation is floundering among consumers. Based on the TRI*M Corporate Reputation Index, the industry as a whole scored a grade of 51, indicative of an industry with a vulnerable reputation among its customers.

The TRI*M Corporate Reputation Index also scored automotive manufacturers individually and grouped them into four "tiers" based on their scores - with the Top Tier consisting of companies with the highest corporate reputation scores. The Index identified Honda and Toyota as the strongest performers, while newer entrants to the U.S. market, those struggling to establish strong reputations, fell into the Fourth Tier.

Corporate reputation is a reflection of corporate vision and culture, an asset that impacts business performance, and a measure of confidence in the corporation - in the present as well as the future. It can be the difference between success and failure because superior reputation:

-- Drives profitable sales in a crowded marketplace;

-- Deters competitors;

-- Attracts, motivates and retains talented employees;

-- Facilitates entry into new markets; and

-- Determines corporate worth - market capitalization

According to the TRI*M Corporate Reputation Index, two key factors emerged as the strongest drivers of consumer opinions of an automotive company's reputation: quality of its product and services, and innovation/research and development.

The issue of quality scored the weakest within the industry. As a whole, the industry scored BELOW AVERAGE in assuring customers that they are getting the best built product, and scored just AVERAGE in consumers' perceptions of automotive companies being "well-managed" and able to "do the right thing when problems arise."

In addition, the study found that consumers rated the research and development/innovation of top manufacturers as only AVERAGE. This is an area where manufacturers traditionally invest a lot of money, but the message and differentiation are not getting across to consumers.

"Overall, the automotive industry clearly has a long road ahead of it. Automotive manufacturers need to get back to basics and address these key drivers to fulfill their brand promises of quality and innovation, or risk further decline in their corporate reputations," said Andy Turton, President of TNS-NFO Automotive. "As the market becomes increasingly saturated, automotive manufacturers need to realize that investing in these assets can pay big dividends, especially in the long-run."

Breaking Down the Scores

-- Top Tier companies scored ABOVE AVERAGE on most of the issues

that consumers say dictate reputation, in particular customer

satisfaction, strong manufacturing skills, and standing behind

their products.

-- Top Tier companies scored only AVERAGE on delivering quality

products/services, innovation, research and development, and

doing the right thing when problems arise.

-- Second Tier companies scored BELOW AVERAGE and WELL BELOW

AVERAGE on factors such as "the company is well-managed" and

"I understand what the company represents and what they are

about," respectively.

-- Third Tier companies, which have weaker reputations and are

more vulnerable to crises, also scored WELL BELOW AVERAGE on

clearly communicating what they represent, but fared worse in

customer satisfaction compared to second and top tier

companies.

-- Fourth Tier companies, which are at the most risk, have failed

in creating a favorable impression on customers, scoring WELL

BELOW AVERAGE on "quality" messages. Fourth Tier companies

also scored BELOW AVERAGE on "I feel good about the company"

and on innovation.

"The strong reputations of Top Tier companies make them more resilient to 'hits' on their equity, but that doesn't mean they don't have their work cut out for them. They still have room for improvement and need to continue investing in issues that propel business performance," continued Turton.

Summary: Areas for Improvement

Overall, improving communications on "quality" will have the greatest impact on changing the industry's corporate reputation, followed by a focus on innovation/research and development. For second tier companies, a clear lack of corporate identity exists and focusing on this, in addition to communicating that their company is well-managed, would allow them to create a voice for themselves in the industry. Third and fourth tier companies need to focus primarily on the quality and customer message, and at the same time establish a clear identity for themselves in the marketplace.

About the Study

The study was conducted in May 2003 from a nationally representative sample of over 500 consumers, who were asked to rate eleven automotive manufacturers in the U.S. The TRI*M Corporate Reputation Index employs the company's powerful NFO TRI*M(TM) stakeholder management analytics to evaluate and prioritize the factors that drive companies and their brands with all classes of stakeholders - customers, distributors, employees, investors. NFO TRI*M(TM) has been applied in more than 1,700 studies and 3,000,000 interviews with business and consumer respondents around the world.

Editor's Note

Tier ranking based on NFO Corporate Reputation Index scores: Top Tier = 70-100; Second Tier = 55-69; Third Tier = 35-54; Fourth Tier = 0-35

About TNS-NFO Automotive

TNS-NFO Automotive is a global leader in providing marketing research and strategic counsel services to automotive manufacturers. TNS-NFO Automotive offers deep marketing science expertise through its exclusive interactive panel of more than one million U.S. households and automotive-specific research methodologies, including cutting edge qualitative techniques and rigorous quantitative applications, that track individuals' attitudes, beliefs, behavior toward the automotive industry. Utilizing its integrated and harmonized global knowledge sharing network and common methods, tools and standards, TNS-NFO Automotive replicates and transfers learning and knowledge anywhere in the world.

About TNS

TNS is one of the world's leading market information groups. We provide market measurement, analysis and insight through our global network of operating companies in 70 countries. Working with national and multi-national organisations, we help our clients to develop effective business strategies and enhance relationships with their customers. In July 2003, the group completed the acquisition of NFO WorldGroup, Inc. Further information on TNS can be found on www.tns-global.com.

About NFO WorldGroup

NFO WorldGroup is one of the world's leading providers of research-based marketing information and counsel. "Marketing minds specializing in research"(tm), NFO has facilitated Fortune 500 clients' business decisions for more than 50 years by providing in-depth knowledge and understanding of consumers and brands through research. Their services include comprehensive counsel on market evaluation, product development, brand management, customer satisfaction, pricing, distribution and advertising effectiveness. NFO is a worldwide leader in Internet-based research and maintains one of the world's largest interactive panel communities. NFO is one of the TNS group of companies (LSE: TNN). Visit NFO WorldGroup on the web (www.nfow.com).

Automotive Manufacturer Tier Rankings

Top Tier
Honda
Toyota

Second Tier
GM
Volkswagen
Ford
Nissan

Third Tier
Daimler Chrysler
Mazda
Mitsubishi