Power Results Show No Gain

May 5, 2003

DETROIT — Japanese and German auto manufacturers still dominate a leading measure of quality by J.D. Power and Associates, and most of the industry remains below average in things gone wrong during the first 90 days of ownership.

Toyota topped Power's Initial Quality Survey, released Tuesday, for the fourth straight year. Its leading ranking was due to the high quality ranking of its Lexus luxury cars at 76 complaints per 100 cars.

But Toyota was also one of the biggest year-over-year decliners, dropping 7 percent. Honda surprisingly showed the other big corporate decline, dropping 11 percent corporate wide from last year. J.D. Power's Brian Walters said the declines at both companies appeared to come from new model activity and adding new production lines. "We have seen this before...when a line is added, quality slips for all quality at those plants," said Walters noting that Sienna production was added to Toyota's Indiana plant where it already makes Tundras and Sequoias.

Toyota brand vehicles ranked ninth at 121 problems per 100 vehicles behind GM brands Cadillac and Buick, Ford's Mercury brand, as well as Porsche and BMW. Three Toyota vehicles, including the Tundra pickup, Sienna minivan and Tacoma pickup, fell out of leadership positions in their respective categories.

Out of 36 auto brands ranked, just 15 ranked above average. And after improving an average of 6.7 percent per year for four years, the industry as a whole showed no improvement in 2002 with an average of 133 problems per 100 vehicles.

Initial quality and quantity

Power's research shows that consumers rank quality, especially as it is reflected in vehicle dependability, near the top of their buying considerations. "Initial quality is different than vehicle dependability measured over three to five years, but it tends to be a good indicator of dependability," says Walters. But even automakers that make big improvements in quality can be dogged by a bad reputation for years. GM says that while its Malibu has bested better selling and more highly regarded vehicles like Honda Accord and Toyota Camry for two straight years, consumer perception of Chevy's overall quality is only half of its actual quality score. Two contributing factors: When an automaker has too much factory capacity devoted to a model and is forced into heavy discounting to sell them, perception of quality stagnates. And cars that are sold to rental fleets in large numbers, like Malibu and Ford Taurus, also get a reputation for blandness and ubiquity that can hurt sales to consumers no matter how high the quality score.

On the other hand, individual models and brands with serious quality problems often sell very well because of styling and consumer perception that they are higher quality than they are. Perception of quality among Volkswagen vehicles is twice actual scores.

Walters said quality gains across the industry are being stalled by the abundance of new products being launched by automakers. But Walters was quick to add that first year glitches were relatively small. Cars that were redesigned fell an average of just 5 problems per 100 cars, and those problems tend to straighten out in the model's second year. Some redesigned vehicles scored better than their predecessors. Mitsubishi averaged an improvement of 26 problems per 100 cars last year. New vehicles from Chrysler, Hyundai and Toyota also scored better than preceding


The big winners

The big improvers in 2002 were Suzuki, up 31 percent over last year's score based on a better launch of the Aerio; Mercury up 22 percent; Kia up 21 percent and Jaguar up 14 percent. GM as a whole dropped 3 percent in IQS, but still managed to stay ahead of Nissan, which improved 11 percent to 135 problems per 100 vehicles corporate wide.

J.D. Power and Associates publishes the top three cars in each vehicle segment, but doesn't publish the individual model scores. Toyota led all automakers by topping six categories including: Toyota Prius, Corolla and Echo, which took three of the four top spots among compact cars; Lexus ES300 for best entry luxury car; Lexus GS300/430 for best mid-luxury car; Highlander for best mid-size SUV. Ford grabbed top scores in five categories including: Mercury Sable for best premium mid-size car; F-Series for best full-size pickup truck; Crown Victoria for best full-size car. Ford also gets credit for the Mazda Miata leading sporty cars and the Mazda B-Series as best compact pickup because of its controlling stake in Mazda. GM topped three categories including Chevy Malibu as best mid-size car, Chevy Suburban as best full-size SUV and Oldsmobile Silhouette as best minivan.

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