2010 Initial Quality Survey

http://wheels.blogs.nytimes.com/2010/06/17/toyota-takes-tumbles-in-initial-quality-survey/?emc=eta1

As most people who follow the auto industry know, the J. D. Power & Associates Initial Quality Study is published each year as one of the most critical studies on auto brand ratings. This year's study looks at 2010 vehicles during the first 90 days of ownership.

Toyota dropped to 21st this year (out of 33 brands) from sixth in 2009. Toyota's problems per 100 vehicles went up to 117 versus this year's industry average: 109. The study reflects problems related to vehicle design, as well as those stemming from defects.

Number 1, with 83 problems per 100 vehicles, was Porsche. Ford improved from 8th place last year to fifth place this year (93 problems per 100 vehicles). Ford's progress has been consistent and nothing short of exceptional. It reflects the efforts of Alan Mulally who has turned around the culture within that company with his "One Ford" management credo and his commitment to quality brands whether that's resurrecting the Taurus or creating the Ford Fusion Hybrid which is critically acclaimed.

Ford is now sitting in the Top 5 brands of the Power Survey competing against the "luxury divisions" of other companies: Porsche is a luxury division of Volkswagen which ranks 31st (135 problems per 100 vehicles). Lexus (ranked 4th) is, of course, the luxury division of Toyota(ranked 21st, as we reported above). Mercedes-Benz, after a very bad 10 years between 1995 and 2005, has come back up to where they should be at third place (87 problems per 100 vehicles). While Mercedes now sells cars at almost all price points, it is, and always will be, a luxury brand.

Ford's own "luxury brand" (Lincoln) is greatly improved and ranked 8th. Ford has finally made the right decision and announced the end of its Mercury brand (ranked 16th). The two brands that Ford managed to unload (another excellent decision) to the Tata Group, Jaguar (28th) and Land Rover (33rd and last), are better off elsewhere because Ford could not manage them or devote the capital to them that those units needed. As we pointed out in our prior post, Tata appears to be doing something right with those brands because sales are up dramatically. Let us hope that "quality" follows that same trajectory.

Ford's Volvo brand is ranked 10th, so it is "Top 10." It should be first, or at least in that neighborhood. Volvo's number 10 ranking puts it right on the "average" (109 problems per 100 vehicles) for the J. D. Power Study. Within Ford, Volvo has suffered from a similar cultural fate to that of Jaguar and Land Rover. In addition, the issue of whether Ford can sell Volvo or otherwise spin it out of Ford's ownership, has been an ongoing soap opera over recent years. Volvo officially announced at the 2010 New York Auto Show that it will become an independently operating entity of another company as of the 3rd quarter of this year. This announcement was made simultaneously with the introduction of the "All-New Naughty Volvo S 60" which appears to have the goods (a 300 hp AWD 4 door coup that performs) to put that brand out there in a less staid image market.

Overall, the Power Survey is a service that is closely watched and one that has fairly accurately reflected the market's reaction to the quality efforts and market share dynamics of the major players in the auto industry.