General Motors’ Buick brand tied with Toyota’s Lexus to rank highest among nameplates in vehicle dependability – the first time in 12 years that another brand tied with the Japanese luxury brand for the highest-rank position, the JD Power and Associates 2007 vehicle dependability study found.
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The study measured problems experienced by original owners of three-year-old (2004 model year) vehicles and found Buick and Lexus tied in top position with a score of 145 problems per 100 vehicles (PP100). Following were Cadillac, Mercury and Honda.
“With three non-premium nameplates – Buick, Honda and Mercury – ranking within the top five, and particularly with Buick tying with Lexus for the top rank, consumers seeking a vehicle with strong dependability have good choices at various price levels,” said JDP research head Neal Oddes. “Consumers don’t necessarily need to pay premium prices to obtain high quality and dependability.”
Lexus took five segment awards – the most for any brand in 2007 – for the GS300/GS430, GX470, LS430, LX470 and SC430 and Toyota followed with four segment awards for the RAV4, Sequoia, Tacoma and Tundra. Ford, Honda and Oldsmobile each took two awards.
Hummer was the most improved brand in the study, although it continued to rank below the industry average.
The study also found that vehicle models with strong dependability may retain up to 15% more of their value after three years, which may increase their purchase prices when sold used. Vehicle models that demonstrate strong dependability lose their value less rapidly compared with vehicles that are not as dependable.
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By GlobalDataToyota’s Scion xA – which received an award in the sub-compact car segment with a score of 207 PP100 – maintained residual value averaging 71%, which is considerably higher than the industry average of 56%. After three years, the 2004 Scion xA may retain value up to $US10,607 of its initial average transaction price of $14,939, compared with only $8,366 if the model’s residual value rate matched only the industry average.
“Automakers may reap numerous benefits from producing dependable vehicles – not only in higher residual values, decreased warranty costs and opportunities for remarketing their vehicles, but also in higher customer satisfaction and increased likelihood of customers recommending or purchasing newer dependable models,” said Oddes. “This is why it is especially important for automakers to successfully launch new vehicle models with high initial quality and appeal – models that perform well in these regards tend to exhibit particularly strong dependability later in their life cycle.”
The study also found that about 65% of vehicle owners experience one or more problems that require components to be replaced. Owners who had problems that required component replacements within the first three years of ownership were considerably less satisfied than owners who didn’t need to replace components. Satisfaction decreased further if owners were required to replace a major component, such as a transmission, as well as if minor components, such as brake pads, needed to be replaced frequently.
Owners who experienced component failure expected to keep their vehicle approximately one year less than owners who experienced problems but do not need to replace components.
“As owners experience vehicle problems – particularly ones that require components to be replaced – they are less likely to repurchase or recommend their current model,” said Oddes. “Automakers can improve upon customer loyalty by working closely with their component suppliers to monitor quality, since failure of a component ultimately reflects upon the quality of the vehicle brand in the minds of consumers.”
The 2007 study was based on responses from more than 53,000 original owners of 2004 model-year vehicles.
