Launch-Vehicle Quality Plunged, JD Power SaysBy Dale Buss June 23, 2011
The auto industry is doing a much better job of introducing vehicles that excite American buyers, as new models have helped turn around the fortunes of General Motors, Ford, Hyundai and others over the last few years. But as sales of these vehicles have surged, the manufacturing quality of launch models has suffered drastically over the last year, according to the 2011 U.S. Initial Quality Study released today by J.D. Power & Associates, the industrys closely watched arbiter of overall and brand-by-brand quality performance. The apparent main culprits for the problems: the intensifying push to squeeze more fuel economy out of engines and transmissions, and the acceleration of the introduction of new infotainment technologies. And Ford was the biggest individual offender, by far.
The 25th annual Power Initial Quality Survey (IQS) also revealed a resurgence by Japanese brands that long have been associated with top-notch quality, including Lexus and Honda, and a leap upward by some that havent, including Mazda. Chrysler also climbed significantly in the rankings, to 16th this year from 23rd last year. Toyota snapped back to 7th from 21st during its annus horribilis, when safety recalls wracked the brand. But Fords slide in quality which company executives have signaled over the last few months was precipitous, from 5th in last years IQS ranking to 23rd this year. And so overall, domestically based makers werent able to repeat their performance of a year ago, when for the first time, U.S.-based companies had barely surpassed imports in initial quality as measured by J.D. Power.
The new problem with launch-vehicle quality is disappointing for an industry where getting things right the first time with new models had become a mantra. After improvement in the quality of newly launched models every year from 2007 to 2010, the initial quality of 2011 new-model launches those that were all-new or had major redesigns worsened by 10 percent from 2010, to 122 problems per 100 vehicles (PP100) from 111 PP100 in 2010. Conversely, carryover models that havent been significantly redesigned posted better initial quality than ever before, with owners reporting an average of just 103 PP100 compared with 108 PP100 in 2010. Overall, continuing a long upward trend over many years, the industrys initial quality improved again, to an average of 107 PP100 in 2011 from 109 PP100 in 2010.
Exciting models with the latest features are crucial for winning over todays demanding customer, said David Sargent, vice president of global vehicle research for J.D. Power. However, automakers must not lose their focus on the importance of these models also achieving exceptional quality levels. Expected reliability continues to be the single most important reason why new-vehicle buyers choose one model over another, and no manufacturer can afford to give consumers any doubts regarding the quality of their latest products.
Only seven all-new or redesigned models ranked among the top three of their respective award segments in IQS, compared with 17 models in 2010. And only one launch model received a segment award this year versus five launch models in 2010. Just one-fourth of redesigned models performed better than the outgoing previous-generation model did in 2010, Power said, and eight all-new models performed about their respective award-segment averages.
Power fingered engine and transmission improvements, and the surge in infotainment, as the two primary causes for the quality decline. Automakers are designing engine and transmission software to make their models as fuel-economic as possible, but sometimes [this] leads to the engine or transmission hesitating when accelerating or changing gears, and consumers this year are reporting this as a problem more often than in past years. And the introduction of more hands-free and voice-activated connectivity systems is proving popular with consumers, but some vehicle owners report that their system is not intuitive and/or does not always function properly, Power reported.
Fords quality slide is the most dramatic individual-brand development in IQS over the last year. The last time the brand came in below the industry average, as this year, was 2006, said Raffi Festekjian, Powers director of automotive research. Ford had improved basically for the last decade in IQS, but this year theyve probably tried to do too much too quickly, he said. And theyre ware of this. Indeed, company executives internally identified a significant problem months ago even as Ford was sprinting to huge gains in market share amid a slowly recovering U.S. industry. In April, however, while reporting first-quarter results, the company said that quality performance for the year would be mixed after falling short of a goal to improve during the period.
And on Tuesday, Mark Fields, Fords president of the Americas, indicated that the problems have persisted, to some extent. In North America, well be mixed for the year in terms of quality performance, he told reporters at a Ford event. He also conceded that the quality issues specifically included MyFord Touch and some powertrain issues. Consumer Reports and, evidently, many consumers complained about the difficult of understanding and using controls in the system that is Fords latest infotainment innovation, complementary to Sync. But Field insisted that Ford is largely back on track on those issues.
Interestingly, its in the areas of infotainment and powertrains where Ford innovation has surged lately, and the company has been highlighting both in its sales and marketing emphases. Sync now is demanded by huge majorities of purchasers of many Ford models, and other auto makers have been trying to catch up with the technology and, especially, the marketplace buzz generated by Sync. Earlier this week, presumably not by coincidence, Ford highlighted for dozens of automotive journalists some current and future advances in connectivity, including better and easier voice-recognition technology and even plans to boost the clarity of the fonts used in infotainment devices.
Clearly, consumers are interested in having new technology in their vehicles, but automakers must ensure that the technology is ready for prime time, Sargent said. Successful companies will be those that can take this incredibly complex technology and make it reliable, seamless and easy for owners to operate while they are driving. There is an understandable desire to bring these technologies to market quickly, but automakers must be careful to walk before they run.
At the same time, Ford has made much of how its advances in powertrains have been boosting available fuel economy in many models, especially through EcoBoost, a platform that combines turbocharging and direct injection to squeeze more mileage and power out of four- and six-cylinder engines. In May, more than half of Ford F-150 trucks sold were equipped with six-cylinder engines even though the option had only become available around the end of 2010. Festekjian said that the all-new Ford Fiesta, in particular, also presented powertrain issues though its engine isnt an EcoBoost variant.
Chrysler executives, too, may have been anticipating the release of IQS today because they have been seeding their interaction with journalists lately with references to quality. Weve gotten ourselves, at least with our internal data, to where I dont think we have to be embarrassed, Doug Betts, Chrysler senior vice president of quality, told Bloomberg. His remarks followed news earlier this week that Consumer Reports reported significant boosts in quality in several of the new models that Chrysler has been rolling out as it restocks the product cupboard. We see major improvements for models that have had a significant redesign, David Champion, senior director of the magazines auto test center, said in a statement.
Specifically, Consumer Reports cited the Dodge Durango as one example of a greatly improved nameplate. It received the magazines very good ratings for both V6 and V8 versions, with praise for a more sophisticated exterior, comfortable ride and hard-working engines; but reviewers knocked it for a balky transmission and long braking distances. And among all-new and redesigned models, the Durango was a notably strong performer in Powers new IQS as well, along with the Hyundai Equus; both ranked second in their respective segments in PP100, including both launch and non-launch vehicles.
Chryslers indicators [from IQS] were good, Festekjian noted, including segment awards for the Dodge Challenger and for the Chrysler Town & Country Minivan. The latter recognition was especially significant, he said, because Town & Country was competing against two completely redesigned entries in the minivan segment, Toyota Sienna and Honda Odyssey.
Toyotas bounce-back was predictable, Festekjian said, just because it has pushed past the safety issues stemming from its unintended-acceleration debacle of early last year, which resulted in a massive recall, dissatisfied Toyota owners, and huge damage to its brand. Another, less obvious boon for Toyota, he said, was that its two highest-volume vehicles by far, Corolla and Camry, didnt undergo major redesigns, and their PP100 scores improved significantly.
While Cadillac and GMC placed 9th and 10th in this years IQS, just above the industry average, Festekjian said that GM launch vehicles also contributed to the surveys overall pattern of issues with new powertrains. He said that both the new Chevrolet Cruze and all-new Buick Regal scored below their segment averages, which also include non-launch vehicles, and that the vehicles problems largely were engine-related issues. At the same time, Festekjian said, the new Chevrolet Volt a technologically advanced and difficult launch model if there ever was one scored well in PP100, above the compact-car segment average.