From the Editor: Detroit Making Strides

June 30, 2009
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New vehicles sold by Chrysler, Ford Motor Co. and General Motors Co.’s domestic brands have improved in initial quality by 10% when compared to last year, according to the J.D. Power and Associates 2009 Initial Quality Study (IQS) released in June.

While this is better than the 8% improvement rate achieved by the industry overall, it still puts the domestic automakers behind their foreign counterparts. Lexus, Porsche, Cadillac, Hyundai and Honda took the top honors in this year’s survey.

In addition to Cadillac, GM’s Chevrolet brand performed above the industry average. For the Ford Motor Co., only its Ford and Mercury brands performed above the industry average. Chrysler, which recently emerged from bankruptcy, did not have any of its brands score above the industry average.

The survey measures overall quality during the first 90 days of ownership, including design and mechanical issues. Overall, the 2009 industry average for initial quality is 108 problems per 100 vehicles (PP100), which is down from 118 PP100 in 2008. Initial quality for domestic brands has improved to an average of 112 PP100 in 2009 from 124 PP100 in 2008, according to the report.

We all have encountered people who will not purchase the first few model years of a vehicle or a newly redesigned model until “the bugs have been worked out.” The good news is that this year’s study shows quality is improving in the first generation of vehicles and redesigned autos.

Historically, all-new models typically have below-average levels of initial quality, but this year several all-new models fared better than their segment averages including the Hyundai Genesis, Kia Borrego, Toyota Venza and Volkswagen CC. The redesigned models that showed improvement from prior models include the Acura TL, Ford F-150, Honda Pilot and Nissan Z.

“Achieving high levels of initial quality in all-new models is one of the greatest challenges for manufacturers,” said David Sargent, vice president of automotive research at J.D. Power and Associates. “Now that more manufacturers are getting their launch quality right straight out of the gate, consumers can expect the quality of new vehicles to continue to rise.”

Improving initial quality is a start for the Detroit automakers, but will it be enough to change people’s perceptions of them? Sargent adds that quality enhances an automaker’s reputation for reliability, a critical purchase consideration for many consumers. It is, but how much does quality influence the average consumer’s decision? Is it enough to bring back the Big Three?

Share your thoughts with me at campbellg@bnpmedia.com or with other readers on LinkedIn at http://www.linkedin.com/groups?gid=1876808.

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