July 10, 2003

Japanese brands lead dependability study, but domestics outpace Europeans

Westlake Village – While Japanese-branded vehicles continue to dominate in terms of long-term vehicle quality, the Europeans have lost their edge over the U.S. domestic-branded vehicles, according to the J.D. Power and Associates 2003 Vehicle Dependability Study(VDS) released on Tuesday.

The 2003 study, which measures problems reported by original owners of 2000 model-year vehicles at three years of ownership, finds that although there is near parity between U.S. Domestics and Europeans in terms of initial quality, substantial quality gaps appear between the Domestics and the Europeans in long-term durability. On average, models by domestic automakers outperform the Europeans by 49 problems per 100 (PP100) vehicles at three years of ownership.

“Conventional wisdom said that dependability was the property of the Japanese and Europeans,” said Joe Ivers, partner and executive director of quality/customer satisfaction at J.D. Power and Associates. “While that’s still true for automakers like Toyota and Honda, it’s no longer the case for many of the Europeans. Porsche, Jaguar, Saab and BMW perform well above the industry average in dependability, but many other European brands are bought based on a reputation for long-term quality and fall far short of even the average. This is in stark contrast to the results of the first VDS, conducted in 1990, when Mercedes-Benz led the industry.”

Toyota boasts nine models with top segment rankings, followed by Ford Motor Company and General Motors with three each, and American Honda and Porsche Cars North America with one each. Lexus is the top-ranked nameplate for the ninth consecutive year. Porsche Cars North America leads the corporate ranking, while Toyota Motor Sales leads among the full-range vehicle manufacturers. General Motors is the only domestic manufacturer to rank above the industry average in the corporate rankings, with 12 models finishing in the top three of the segment rankings, second only to Toyota Motor Sales with 13.

Other notable performances in the 2003 results include Subaru and GMC, which both performed considerably better when measured at three years in VDS than when they were measured at 90 days of ownership. At the other end of the spectrum is Mercedes-Benz, which experiences the largest quality gap between initial quality and long-term quality measurements. Also deteriorating more rapidly than the average vehicle are Audi and Volvo.

Some problems that occur much more frequently as vehicles age include excessive brake wear, air conditioning system issues, wind noise and the replacement of components not called for under the normal maintenance schedule. New problems that arise as vehicles age include issues with shocks and struts; faded, cracked or worn materials; worn or broken moldings; cracked and peeling paint; and various fluid leaks.

Long-term quality measures have a big consumer impact. Among new-vehicle buyers, 52 percent indicate that long-term durability is among their most important factors in choosing a vehicle. Further, among used-vehicle buyers, 42 percent report buying a used vehicle instead of a new vehicle because they felt that the quality of the used vehicle is as good as a new one. This is particularly true among luxury used-vehicle buyers.

“With the proliferation of long-term warranties being offered on new vehicles and the increasing popularity of manufacturer-sponsored used-vehicle certification programs, long-term quality issues are critical to manufacturers and their bottom lines,” said Ivers. “Manufacturers must align themselves with consumer expectations for durability. Long-term quality issues have a substantial impact on customer retention, even among

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