Bloomberg News

Toyota Joins GM in Showing Auto-Quality Gains in Study

February 13, 2013

Toyota Motor Corp. led automakers with the fewest problems reported by U.S. owners of its three- year-old cars, while General Motors Co. (GM:US) and Honda Motor Co. also fielded models that topped their segments.

Toyota’s Lexus luxury brand led the industry for the second straight year, its namesake line tied for third, and seven of its models topped their segments. Strides by Toyota, GM (GM:US) and Honda helped reduce the industry average for problems per 100 vehicles to 126, the fewest in the 24-year history of J.D. Power & Associates’ Vehicle Dependability Study. J.D. Power released the latest edition of the study yesterday.

Automakers’ ability to retain their customers hinges on the reliability of their vehicles, Westlake Village, California- based J.D. Power said in a statement. The researcher said 54 percent of owners who experience no problems with their vehicle stick with the same brand on their next purchase. Just 41 percent are loyal if they report three or more problems.

“It’s very clear that the more problems somebody has, the less likely they will be to buy the same brand of vehicle again,” David Sargent, vice president of global automotive research at J.D. Power, said in a telephone interview. “When manufacturers are fighting for every decimal point of market share, that’s a pretty powerful message.”

Toyota Models

Toyota’s RAV4 sport-utility vehicle and Sienna minivan were among the Toyota City, Japan-based automaker’s seven vehicles that topped their segments, J.D. Power said. The automaker led the industry even though several of its 2010 models were among the 10 million vehicles that were recalled to fix defects related to unintended acceleration and that performed poorly in the market researcher’s study of new-car quality.

“There was a perception that there were these Toyotas falling apart all over the place,” Sargent said. “The reality was there were a relatively small number of well-publicized issues. A lot of Toyota owners were very concerned their vehicle might have problems, but most of them actually didn’t.”

GM followed Toyota with four models winning segment awards, and the Detroit-based automaker matched the industry average on an overall basis, Sargent said. This is the first year since 2005 that GM on a companywide basis didn’t score below the industry average, he said.

GM’s Winners

The GMC Sierra pickup, Chevrolet Camaro sporty midsize car, Chevy Tahoe SUV and Buick Lucerne large sedan all topped their respective categories. Cadillac was GM (GM:US)’s only brand that didn’t improve both in ranking and average number of problems.

As GM’s quality has improved, investors have placed greater value on its stock relative to sales compared with the Standard & Poor’s 500 Index. Toyota’s market value relative to sales is trading at the lowest discount to the S&P 500 in almost three years.

Honda’s Crosstour midsize SUV and Acura RDX small luxury crossover led their respective segments, and both of the Tokyo- based automaker’s brands had better scores than a year earlier.

The industry’s improving quality may help draw consumers back into showrooms after they delayed purchases during the recession, increasing the average age of vehicles on U.S. roads to almost 11 years, according to researchers R.L. Polk & Co. (POLL:US) and Experian Automotive.

“It is virtually certain that new vehicles being sold today will be even more reliable in three years,” J.D. Power’s Sargent said in the statement.

Porsche Second

Volkswagen AG’s Porsche owners reported 94 problems per 100 vehicles, second only to Lexus’s 71. Toyota’s namesake brand and Ford Motor Co. (F:US)’s Lincoln luxury line tied for third at 112. Dearborn, Michigan-based Ford’s namesake brand had an average score of 127, one point below the industry average and two points behind GM’s Chevrolet.

Daimler AG’s Mercedes-Benz jumped one spot to fifth place in the rankings, with 115 problems per 100 vehicles. Mercedes again topped rival Bayerische Motoren Werke AG, which ranked below the industry average for the fourth consecutive year with a score of 133.

Chrysler Group LLC’s Ram was the most improved brand from a year earlier, with the truck brand’s average problems experienced per 100 vehicles plunging by 52 points to 122. Ram also jumped 20 spots to place ninth among all nameplates.

Three of Auburn Hills, Michigan-based Chrysler’s other brands were among the study’s seven worst-ranked names. Ram’s 2010 model year light-duty truck was the first product that the company targeted to improve quality after its 2009 bankruptcy and alliance with Fiat SpA, Sargent said.

“Chrysler has now applied that approach to the other products,” he said. “We would hope to see the Chrysler Group products improve fairly rapidly over the next few years.”

The industry’s average of 126 problems per 100 vehicles from the 2010 model year compares with 132 in last year’s study and 151 the year before. U.S. automakers narrowed the gap of scores compared with import brands to 10 problems from 13 a year earlier, according to J.D. Power.

To contact the reporter on this story: Craig Trudell in Southfield, Michigan, at ctrudell1@bloomberg.net.

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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