Sunday, August 20, 2006

GM, Ford make quality strides

Thursday, August 10, 2006
GM, Ford make quality strides
Mercury, Buick, Cadillac take 3 of top 5 survey spots
Josee Valcourt / The Detroit News

Toyota and its luxury Lexus brand still set the standard, but Detroit automakers, led by Ford Motor Co., are making impressive strides in long-term quality and are outperforming many foreign rivals, according to a closely watched industry study released Wednesday.

While Lexus was the top brand, Ford's Mercury brand and General Motors Corp.'s Buick and Cadillac marques rounded out the top four, according to J.D. Power and Associates' 2006 Vehicle Dependability Study.

Toyota and Lexus won top honors in eight individual categories, more than any other company. At the same time, though, several GM and Ford vehicles also were named the best in their segments.

"It proves the capability of Ford and the domestic automakers to compete in quality," Anne Stevens, chief operating officer of Ford's Americas division, said in an interview.

J.D. Power, which surveyed nearly 50,000 owners of 2003 models about their vehicle woes in the first three years of ownership, found that, with a few exceptions, automakers across the board are improving long-term quality and durability.

"Manufacturers are listening to the customers and starting to implement quality measures at the plants," said Neal Oddes, director of product research and analysis for J.D. Power.

The overall industry average improved from 237 problems per 100 vehicles in 2005 to 227 problems per 100 vehicles in 2006.

Additionally, mass-market vehicles appear to be catching luxury brands in long-term quality, narrowing the gap in reported problems, Oddes said.

Improvements in ride, handling, braking and powertrains for the high-volume brands helped push those vehicles closer to the luxury brands.

Those attributes, according to the study, have a strong impact on customer satisfaction.

J.D. Power's initial quality study, which measures problems in the first 90 days of ownership, typically gets more attention.

But Oddes said the dependability study is important for automakers because how owners feel about their car or truck after three years of ownership can affect the make and model they choose the next time they're in the market for a new vehicle. When an automaker's vehicles are considered dependable, brands retain value, loyalty increases and consumers often recommend them to friends, Oddes said. Automakers also spend less on warranty costs.

"What we see is that as quality improves, the need for replacing components decreases at the same pace," Oddes said.

The gains in long-term quality among Detroit automakers in part reflect their response to the growing dominance of Asian manufacturers in the U.S. market.

GM, Ford and Chrysler have been criticized for lagging their foreign rivals on quality, especially Toyota.

That gap has hurt their image and cost them sales as ever more American consumers turned to import models.

But Detroit automakers have made improving quality a priority, and this year's study shows they're making progress.

All of Ford's domestic brands -- Ford, Lincoln and Mercury -- outperformed the industry average. The results represent a breakthrough for Ford, which has struggled to improve quality.

Ford's Mercury division finished second among brands behind Lexus. Lincoln, however, had more problems per 100 vehicles than in 2005.

"We are extremely pleased with the result," Stevens said. "This is proof of the hard work the teams in Ford are doing."

"Mercury leading the nonpremium nameplates is fantastic for the company."

General Motors Corp.'s Buick and Cadillac brands also fared well, nabbing the No. 3 and No. 4 slots among top performers. Those GM brands outperformed Toyota, the acknowledged quality leader.

Janine Fruehan, a GM spokeswoman, said the results show the company's push over the past several years to improve quality at every level of the car-building process is working.

"Our focus is to build them right the first time," Fruehan said.

Despite the encouraging signs, Detroit automakers still have room to improve. Among the 10 best performers in the study, seven were import brands.

GM's highest volume brands -- Chevrolet, GMC, Pontiac and Saturn -- all scored below average in the J.D. Power survey.

"We're a large company and we have huge portfolio so there is a tendency to have mixed results," Fruehan said.

"But if we look at other metrics, warranty performance (for those brands) has improved over the five years by 40 percent."

And while the Chrysler Group's trio of brands -- Chrysler, Jeep and Dodge -- each scored better than last year, all had below-average rankings.

That was a slip for the Chrysler brand, which finished above average last year, although it still ranked better this year than its luxury sister marque, Mercedes-Benz.

"Chrysler has slipped behind the industry average, but again you take into consideration in the four-year period they do show quite a considerable improvement from 2003 to 2006," Oddes said. "Chrysler is moving at a greater pace than the industry."

Mercedes, which has been dented by quality problems, also has shown tremendous improvement from last year, he said.

Though Mini and Kia remain near the bottom of the rankings overall, the two were the most improved brands in the study.

Jaguar, owned by Ford, was the third most improved and was the highest-ranking European brand.

The results, particularly for domestic carmakers, indicate that they're addressing quality at the start of production at factories rather than tackling problems late in the manufacturing process, said Michelle Hill, director of North America benchmarking for Harbour Consulting Inc.

"They're focusing on getting the quality right from the start," said Hill, adding that Harbour, which measures productivity in auto factories, has seen a correlation between improved quality and higher productivity among domestic brands.

You can reach Josee Valcourt at (313) 222-2300 or

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