The gap in long-term quality between luxury and non-luxury brands in the US has been cut in half during the past four years, according to the JD Power and Associates 2006 vehicle dependability study.
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The study, which measured problems experienced by original owners of three-year-old (2003) vehicles, found that there is now an ever-smaller gap in reported problems between luxury and higher-volume brands – averaging 15 problems per 100, down from 31 PP100 in 2003. Quality improvements with non-luxury brands were seen primarily in two categories – ride, handling, braking, and engine and transmission – which both have a strong impact on customer satisfaction.
The presence of several non-luxury brands among the top-ranking brands in the industry further underscored the shrinking dependability gap between luxury and non-luxury brands. While Lexus was the top-ranking brand in vehicle dependability for a 12th consecutive year and luxury-make Cadillac ranked fourth, three of the top five-ranking brands in vehicle dependability were non-luxury makes. Mercury and Buick, respectively, followed Lexus in the brand rankings, and Toyota ranked fifth.
“The industry continues to make improvements in long-term vehicle quality, and not just among luxury makes that benefit from smaller production volumes on the assembly line,” said Neal Oddes, director of product research and analysis for JD Power. “Many high-volume, mass-marketed brands have acquired a foundation of quality products from which to challenge the normally strong performances of the luxury brands. What this means for consumers is that they don’t necessarily have to spend a lot of money to get a high-quality used vehicle, and vehicles with high long-term dependability ratings retain more of their original value than brands with lower dependability ratings. This pays off for the consumer when it’s time to trade in their vehicle.”
The benefits of strong vehicle dependability are particularly high for manufacturers, the researcher said. In addition to retaining their value better, brands that perform well in VDS have higher levels of owner recommendation and repurchase intent, and increased sales volumes compared to brands with average to poor dependability ratings. According to retail transaction data from the Power Information Network, sales made to loyal customers – those who trade in the same brand as the one they purchase – result in an average vehicle gross of $US250 more per sale than those made to non-loyal customers. Additionally, vehicles with high levels of reported problems have higher rates of failure of vehicle components such as brake pads, brake rotors and batteries, which is costly to manufacturers if the failure occurs while the vehicle is still under warranty.
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By GlobalData“Perceptions about dependability can have a tremendous impact on an owner’s satisfaction with their vehicle, which is no small matter for manufacturers,” added Oddes. “In terms of retained value, recommendation and repurchase intent, and component replacement, vehicle dependability can have a direct impact on a manufacturer’s bottom line.”
Lexus, Toyota and Honda models dominated the 2006 segment rankings. Lexus models led in four segments: GS 300/GS 430 (midsize premium car), LS 430 (large premium car), SC 430 (premium sporty car) and GX 470 (midsize premium MAV). Four Toyota models also led in their respective segments: Echo [Vitz/Yaris] (sub-compact car), RAV4 (compact MAV), Highlander (midsize MAV) and Tundra (large pickup).
Honda models ranked highest in three segments: Civic (compact car), S2000 (compact premium sporty car) and Odyssey (van). Models by Acura, Buick, Cadillac, Chevrolet, Ford, Mazda, Mercury and GMC each ranked highest in one segment.
Mini and Kia were the most improved brands in the study, although both continued to rank below the industry average. Mini, which was first included in the VDS in 2005, earned a 103 PP100 (27%) year-over-year improvement while Kia improved twice as much as any other brand in the past three years, improving 87 PP100 (22%) from 2005.
The 2006 study was based on responses from 47,620 original owners of 2003 model-year vehicles.
2006 Brand Ranking
Problems per 100 Vehicles
Lexus 136
Mercury 151
Buick 153
Cadillac 163
Toyota 179
Acura 184
Honda 194
Jaguar 210
BMW 212
Infiniti 215
Lincoln 220
Ford 224
Oldsmobile 224
Industry Average 227
Chrysler 232
Pontiac 232
Subaru 232
GMC 239
Mercedes-Benz 240
Chevrolet 241
Nissan 242
Mazda 243
Porsche 248
Hyundai 253
Dodge 258
Mitsubishi 260
Jeep 264
Volvo 272
Audi 279
Mini 280
Isuzu 283
Saturn 289
Volkswagen 299
Hummer 307
Kia 310
Suzuki 318
Saab 326
Land Rover 438
