A focus on improving quality and reducing defects seems to be paying off for the world's automakers. The industry made a big rebound in the 2016 American Customer Satisfaction Index (ACSI) survey released on Tuesday. The overall satisfaction score hit 82 out of 100, a 3.8 percent increase over last year, when a record number of recalls drove satisfaction levels down dramatically.
David VanAmburg, ACSI's managing director, credits a combination of aggressive price incentives — up 13 percent in the first two quarters of 2016 — and better quality for the turnaround.
"Price incentives are certainly heating up and people always love when there's a discount, but the biggest driver of satisfaction is when quality is improving," VanAmburg told NBC News. "When people perceive they're getting better value for their money because the products are being manufactured better — fewer defects, nicer perks and features — that's always going to be a positive."
Of the 24 brands tracked by ACSI, 16 improved, including all big three U.S. automakers. Five declined in satisfaction, including three premium name plates: Mercedes-Benz (down 2 percent), Cadillac (down one percent) and Acura (down 8 percent). With an ACSI score of 76, Acura was at the bottom of the ratings, two points lower than Volkswagen (78).
VW dropped three percent this year and VanAmburg believes the emissions-cheating scandal had a lot to do with that.
"In the near future and even the distant future, it's going to be a long road ahead for VW to come back from this," VanAmburg said.
Good News for Domestic Manufacturers
U.S. automakers have nearly closed the satisfaction gap with their foreign competitors. Their overall ACSI score of 81 is just one point behind Japanese, Korean and European manufacturers, which averaged 82.
In fact, the highest score this year went to Ford's Lincoln division, which jumped five percent since last year to score an 87. Honda (86) claims second place. Toyota and BMW tie for third place at 85. Lexus, which held the top spot last year, scored an 84, as did Subaru, GMC and Nissan's Infiniti line.
Jack Gillis, author of The Car Book 2016, has been reviewing vehicles for 36 years. He's not surprised with the big improvement in satisfaction, especially for American automakers.
"In spite of a flood of recent recalls, the quality of today's new cars has never been better," Gillis told NBC News. "Two key reasons for the improvement are greater attention to customer satisfaction as a means to keep customers coming back, and competition. Once the benchmark of quality, the Japanese car makers have been joined by the Koreans in providing top quality vehicles which, in turn, has put pressure on the U.S. makers to do the same."
Luxury models have dominated the ACSI ratings for years, but now the top tier is evenly split between mass-market autos — Honda, Toyota and Subaru — and luxury brands. Five of the top 10 nameplates this year are mass-market cars.
"The rise of mass-market vehicles may well be at the expense of luxury brands in the sense that buyers now see little differentiation between luxury cars and regular ones," Claes Fornell, ACSI chairman and founder, said in a statement. "If there is little difference, why pay more? Exclusivity may not be enough."
Not that all mass-market brands are doing well at satisfying their customers: Volkswagen, Jeep and Dodge continue to struggle. But based on this new survey, the best mass-market brands are just about equal to the best luxury brands.
"That's good news for consumers because they can get a Honda, Toyota or Subaru for a lot less than they're going to pay for a BMW," VanAmburg said.
Jessica Caldwell, a senior analyst with Edmunds.com, told NBC News she's noticed a trend: Automakers are no longer saving the top luxury features, especially safety equipment, for their luxury brands. "They're trickling down to the mainstream models, and because of that, luxury vehicles are becoming more of an image purchase, rather than for the actual features themselves," she said.
Caldwell gave this example: On the higher trim levels of the Accord, Honda uses a side view mirror with a built-in camera that allows the driver to see what's going on behind the car at all times.
"We don't even see that safety feature in luxury cars," Caldwell said. "Automakers are starting to redefine what a luxury brand is and the lines are becoming blurred."
The full results of the 2016 American Customer Satisfaction Index auto report are available online.