Study demonstrates strong correlation between quality perceptions and resale values

Automotive Lease Guide (ALG), a subsidiary of DealerTrack Holdings, Inc. (Nasdaq: TRAK), a leading provider of on-demand software and data solutions for the U.S. automotive retail industry, today announced that Japanese carmakers led by Toyota, Honda, Nissan and Subaru were the top performers among mainstream brands in ALG’s Spring 2009 Perceived Quality Study (PQS). Hyundai and Ford showed the strongest year-over-year improvement, jumping 8 and 6 places respectively, while Lexus, Mercedes-Benz and BMW ranked the highest among luxury brands and overall.

“In what has been a tumultuous period for the entire industry, Japanese carmakers continue to dominate the battle for perceived quality aided by strong product portfolios and effective sales strategies, including lower incentive spending and realistic price and volume targets,” said James Clark, general manager of ALG. “Hyundai’s strong new vehicle portfolio, improvements in actual quality and increased brand awareness, and Ford’s new designs on key models like the F150 and Fusion coupled with its ability to distance itself from the other domestic manufacturers, helped both of these companies strengthen the opinion of their overall brands.”

The top performers in PQS also have industry-leading residual values, as Toyota, Honda, Nissan, and Subaru have all recently won multiple ALG Residual Value Awards for individual models. In addition, Honda, which ranked second in the Spring 2009 PQS, has won ALG’s overall Brand Residual Value Award for the past six years.

Mr. Clark said, “We have found a strong correlation between perception of quality and vehicle resale values that we have not observed with other market data. PQS scores have proven to be an important metric that helps explain residual performance and overall brand strength, and this metric has become a critical component of our forecasting model, enabling us to forecast residual values with greater accuracy.”

Now in its 9th year, ALG’s PQS is based on a proprietary rating scale derived from surveys of car-owners in the U.S., which then determines the relative positions of mainstream and luxury brands. The survey includes a variety of topics ranging from attitudes towards the economy, interest in and valuation of new vehicle content, and consumer perceptions of quality.

The top five mainstream brands were Toyota, Honda, Nissan, Subaru and Volkswagen, while Lexus, Mercedes-Benz, BMW, Porsche and Acura ranked highest among luxury brands.