IBD Op-Ed - By Constantine Kambanis, Raghavan Mayur (tecnometrica) and Bert Holland (autofuturesgroup)

Auto-industry insiders over the years have often blamed Detroit's mounting problems on mediocre management, poor technological leadership and a lack of vision for the future.

While the successful foreign firms relied on technological innovation, a thorough study of the market, clever marketing and high quality, Detroit's Big Three automakers relied on massive economies of scale, price discounting, zero-percent financing, rebates and volume fleet sales, all of which led to erosion of vehicle resale values.

What were customers to do? Buy highly rated "foreign" cars with high resale values or steeply discounted American vehicles with lower resale values?

The answer is in the numbers. From 1992 to 2007, the number of imported passenger vehicles more than doubled, and Toyota Motor Co. is now the world's largest automaker. According to a new joint study by TechnoMetrica Market Intelligence and Auto Futures Group, the No. 1 brand Americans will consider buying is Toyota.

Our study also shows that when it comes to brand power among customers, Toyota and Honda owners are — on average — four times more likely to promote their brands to friends than Ford owners are, and three times more likely to promote their brands than GM or Chrysler owners.

This does not bode well for Detroit, where the Big Three are at crossroads. Already bleeding from declining sales, increasing incentives and heavy lease losses, they must at the same time find the resources to retool their lineups, remake their images and shore up their market values.

Today, hybrid technology is the single most popular alternative fuel choice, with two-thirds of consumers saying they will consider a hybrid the next time they're in the market for a new vehicle. This is bad news for Detroit and good news for its hybrid-savvy competitors.

When consumers think of hybrid vehicles, the first manufacturer that comes to mind is Toyota. In our survey, Toyota consistently outpaces all other brands by a wide margin. In the latest survey the standings are Toyota (44%), Honda (15%) and Ford (5%).

Moreover, American consumers are more than twice as likely to promote an Asian or European brand to others as they are to promote an American brand.

We base this on responses we got when we asked owners how likely they were to recommend their brand of vehicle to friends or colleagues. We then came up with a "net promoter score" by subtracting the percentage of detractors from each brand from the percentage of promoters.

The top brands that owners were most likely to promote were all foreign — Lexus had a score of 81%, Toyota 75%, BMW 73%, Honda 72%, Subaru 68% and Infiniti 59%.

Whereas Asian manufacturers hold the keys to hybrid sales, American companies continue to plug flex fuel vehicles.

But longer term, the Big Three are working on such groundbreaking vehicles as the Chevy Volt. Although such vehicles do not yet appear to be sufficiently capable of generating the sales volumes needed to turn things around, it does show that the Big Three have read the writing on the wall and are beginning to emphasize innovation.

While the No. 1 considered brand is Toyota, the No. 1 brand being driven today continues to be Ford.

For Detroit, in other words, it's not too late to change. Seeds of revival already have been planted.

Next: A GE or Google in your garage?

Kambanis is a senior analyst and Mayur is president of TechnoMetrica Market Intelligence, IBD's polling partner. Holland is a senior partner with the Auto Futures Group.

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