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J.D. Power Initial Quality Study Released

May 6, 2003

According to the J.D. Power and Associates 2003Initial Quality Study, new and redesigned model launches often demonstratehigh initial quality, which may dispel the myth that quality always suffersduring new-vehicle launches. An analysis of all replacement-modellaunches and major vehicle redesigns since 1998 shows an average decline ofonly 5 problems per 100 vehicles (PP100) in initial quality in the launchyear, which is usually more than regained in the year after launch, says the study. "Consumers often delay purchasing a model in its first year, waiting for themanufacturer to get the so-called bugs out," said Joe Ivers, partner andexecutive director of quality/customer satisfaction at J.D. Power andAssociates. "Yet, the quality of most new-model launches is actually verygood. Some manufacturers have virtually eliminated the launch-year qualitydrop-off. A few have even demonstrated a pattern of launching models withbetter initial quality than the models they replaced."According to the study, launch-year initial quality for replacement models at Mitsubishi, has averaged 26 PP100 better than predecessor models in recentyears. Newly launched/redesigned vehicles from Hyundai, Toyota and theChrysler Group also record better initial quality on average than the modelsbeing replaced.The study also finds that for the first time since 1998, the industry hasnot shown year-over-year improvement in initial quality overall, and remainsflat at 133 PP100. Between 1998 and 2002, the industry achieved steadyimprovement, averaging 6.7 percent per year. "The initial quality drive for improvement among some manufacturers has beenstalled by new-model launches that were especially challenging," said Ivers."For other manufacturers, existing models show some deterioration thatoffset initial quality improvements elsewhere."The study further indicated that several manufacturers have accomplished significant improvements ininitial quality in 2003. Suzuki is the most improved nameplate, improving 31percent over 2002, due largely to the successful launch of the all-newAerio. Mercury, Kia and Jaguar also have improved by 22 percent, 21 percentand 14 percent, respectively.Toyota Motor Sales, U.S.A., Inc., is the highest-ranking corporation in the2003 IQS, followed by Porsche Cars North America, Inc., BMW of North Americaand American Honda Motor Co. Lexus is the top-ranked nameplate, according to the study.At the model level, Toyota Motor Sales vehicles rank highest in sixsegments, Ford Motor Company vehicles rank highest in five, General MotorsCorp. in three and American Honda and DaimlerChrysler vehicles each rankhighest in one segment.The study shows that the initial quality gap between Domestic, European,Japanese and Korean brands continues to narrow. While Domestics trailedtheir European and Japanese counterparts by at least 19 PP100 five yearsago, Domestics and Europeans are now equal, and both trail the Japanese by 9PP100. Korean manufacturers have demonstrated substantial five-yearimprovements in initial quality. In 1998, 116 PP100 separated Korean brandsfrom the Europeans, which led the industry. By 2003, the quality gap betweenthe Koreans and the industry-leading Japanese fell to 26 PP100.The study also reveals that vehicles built by German and Japanesemanufacturers in their native markets record higher average initial qualityoverall than those built in their North American plants. According to the study, vehicles produced in Germany by BMW, Mercedes-Benz and Volkswagen, and thoseproduced in Japan by Honda, Mitsubishi, Nissan and Toyota demonstratedoverall higher initial quality than the vehicles built by their NorthAmerican plants. There are exceptions, such as vehicles produced by Acura,Mazda and Subaru in North American plants, which show higher quality thanother vehicles built at their assembly plants in Japan."It is important to note that often these manufacturers build differentmodels in North America, and that some of these designs may be moredifficult to build," said Ivers. "However, standardizing quality regardlessof the model, platform or plant is becoming a core requirement of a globalcompetitor."With regard to specific models, only the Honda Accord and Civic and ToyotaCamry and Corolla are produced in both North American and Japanese plants.Honda Accords built in Japan have a nearly 25 PP100 advantage over thosebuilt in North American plants, while Civics built in North America have anearly 15 PP100 advantage over their Japanese-built counterparts. ToyotaCorollas built in both Japan and North America are almost identical ininitial quality. There was insufficient sample to provide the same analysisfor the Camry.2003 IQS Assembly Plant AwardsFor the second consecutive year, Toyota's Tahara, Japan, car plant receivesthe Platinum award for worldwide plant quality with a score of 63 PP100.Toyota sweeps the plant awards in the Asia Pacific region, with theMotomachi, Japan, assembly plant receiving the Silver plant award and theTsutsumi, Japan, assembly plant receiving the Bronze. The General MotorsOshawa #1 plant in Ontario, Canada, and its new Lansing Grand River, Mich.,plant receive the Gold and Silver North/South American plant awards,respectively, while Ford Motor Company's Atlanta plant receives the Bronze.In Europe, BMW's Munich, Germany, assembly plant receives the Gold award,DaimlerChrysler's Bremen, Germany, Mercedes-Benz plant receives the Silver,and Ford Motor Company's Torslanda, Sweden, Volvo plant receives the Bronze.The 2003 Initial Quality Study is based on responses from more than 52,000purchasers and lessees of new 2003 model-year cars and trucks who weresurveyed after 90 days of ownership. This industry benchmark study fornew-vehicle initial quality is now in its 17th year.Headquartered in Westlake Village, Calif., J.D. Power and Associates is anISO 9001-registered global marketing information services firm operating inkey business sectors including market research, forecasting, consulting,training and customer satisfaction. The firm's quality and satisfactionmeasurements are based on responses from millions of consumers annually.
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