Vehicle Quality Improves Despite Bumpy Financial Ride

By Michelle Krebs June 22, 2009

By Michelle Krebs

JD Power trophy - 158.JPG DETROIT -- The financial turbulence of the global auto industry has not hurt vehicle quality. Quite the opposite, according to new data released Monday by J.D. Power and Associates.

"Vehicle quality is better than it has ever been," Dave Sargent,  J.D. Power's vice president of automotive research, told the Automotive Press Association here as he announced the results of the 2009 Initial Quality Study. The study measures defects reported by buyers in the first 90 days of ownership.

"There's a positive disconnect. There's no correlation between the financial side of the business and the production side," said Sargent. "Despite the turbulence on the business side and concern for the future of their own jobs, the people who design and build vehicles are getting on with their jobs and keeping their eye on the ball. That's remarkable."

The industry averaged 108 defects per 100 vehicles -- or 1.08 defects per car -- in the latest study, down from 118 defects per 100 vehicles in 2008. That marks the biggest year-to-year improvement since 2004.

Typically, industry initial quality has been improving at a rate of 6 percent annually; this year the improvement was 8 percent, Sargent said.

That would be particularly noteworthy in any year, but Sargent said, it is especially remarkable in 2008-2009 when vehicles are sitting longer on dealership lots, where they are likely to suffer "lot rot."

"The longer a vehicle sits on a lot, the more defects typically arise," he said. "But despite that, the industry showed a tremendous rate of improvement in initial quality."

Gaps Narrow

The quality gap between vehicles made by domestic manufacturers and import ones was the narrowest ever with a gap of only six defects per 100 vehicles  -- a 40 percent improvement for domestics from last year's study.

No gap existed between domestic and import cars. Domestic and import trucks are nearly on par with defects per 100 vehicles for imports and 117 for domestics. Where the biggest gap occurs is on car-based crossovers where the imports do markedly better with only 111 defects per 100 vehicles to the domestics' 128 defects per vehicle.

Top Performers

Lexus re-captured the top spot from Porsche, which had held it for two years. In fact, Lexus has held the top spot for 12 of the 20 years of its existence.

Porsche came in 2nd.

Cadillac was 3rd and the top-performing domestic brand, largely thanks to vast quality improvements of the newest-generation, high-volume CTS sedan.

Hyundai, which has been creeping up the charts in recent years, was the highest performing non-premium brand. The credit, Sergent said, goes to the strong launch of the Genesis, which had a mere 84 defects per 100 vehicles -- on par with Lexus' overall defects --  but even more so to the vast  improvements in the high-volume midsize Sonata sedan.

Rounding out the above-average set, in order were: Mercedes-Benz and Toyota, which tied;  Ford; Chevrolet and Suzuki, which tied; and Infiniti; and Mercury, which tied. Toyota, Ford and Chevrolet (and Suzuki) were so close in the rankings as to make the teensy difference in defects statistically irrelevant.

jdpower.gif Most Improved

Suzuki was the most improved brand, which soared to above industry average. Sargent said that was due in part to a change in mix of products sold and the strong performance of the SX4.

Saturn, Jeep and Volkswagen, while still below industry average, showed dramatic improvement.

Saturn, the GM brand soon to be spun off to Penske Corp. if all goes well, showed the second-largest gain in initial quality, mostly due to improvements in the compact Vue and Outlook crossover.

Jeep, dead last in the 2008 study, was the third most improved brand with quality improvements across the board in its models and in items such as powertrain, transmission and exterior elements.

Volkswagen was the most improved of European brands. In recent years, it has ranked at or near the bottom. Volkswagen's move up in the rankings came on the hoods of the much-improved Jetta and GTI quality as well as the strong launch of the new CC.

Nissan show gains on the strength of the Altima. GMC gained due to the Acadia crossover.

A troubled launch of the Australian-built G8 didn't help Pontiac, which is going out of business by year-end.  Dodge struggled with the launches of the Ram and Journey.

Solid Launches

Launches of all-new models typically are problematic with their worst quality usually in Year One of existence, Sargent noted. However, he said, some manufacturers showed improvement in launches; others still need work.

Sargent called out the Hyundai Genesis, Toyota Venza and Volkswagen CC as having excellent launches with high-quality levels right out of the chute.

Launches for redesigns of existing models also can be troublesome, Sargent noted, adding the Ford F-150, Acura TL and Nissan Z re-makes had no problems achieving top-notch quality levels.

Award Winners

Based on the IQS, J. D. Power gives awards to the top achievers in 18 segments. Of the 22 awards given: 15 went to Toyota -- five for Lexus, four for Toyota division; four to Ford - three to Ford division, one to Mercury; General Motors, Honda and Nissan each captured two awards each; Chrysler and Hyundai each received one.

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