JEREMY CATO
From Thursday's Globe and Mail Published on Wednesday, Jan. 16, 2008 11:13AM EST Last updated on Monday, Mar. 30, 2009 2:42PM EDT
The days of cars marooned in the breakdown lane and several-day waits for overworked mechanics are long gone — and that's good news for consumers, if not for service bays.
J.D. Power and Associates' latest survey of long-term vehicle reliability, the Vehicle Dependability Study (VDS), found that quality problems have fallen 20 per cent since 2003.
Fewer broken vehicles translates into a cut in service and parts sales, says the U.S. National Automobile Dealers Association. In the United States, service and parts sales fell to $80.5-billion (U.S.) in 2006, from $85-billion in 2005.
Cars and light trucks are better than ever and getting more reliable still. In the past two decades, auto makers have dramatically improved quality and reduced defects. The most trouble-plagued cars today are still far more reliable than the best cars of 20 years ago.
"Over 50 per cent of the vehicles bought 15 years ago — an eternity by any standard for a vehicle — are still on the road today and this is almost double the survival rate from only seven years ago," says Dennis DesRosiers of DesRosiers Automotive Consultants in Richmond Hill, Ont., whose firm does an annual study on vehicle longevity.
"Can you imagine how high the survival rate will be when the current vehicles reach their 15th birthday?" he adds.
Naturally this is good news for consumers, who now suffer from far fewer troublesome breakdowns and nagging glitches than ever before. Quality improvements are also lowering warranty costs for auto makers. If there is a downside, better cars are bad news for the auto service business.
Customers used to take their vehicles in for a tune-up every 45,000 kilometres or so. Now many newer models can go without one for up to 120,000 to 130,000 km or more. And parts that had to be changed every 48,000 km now last three times longer. Many auto makers now recommend oil changes every 12,000 km, rather than the 7,000-to-8,000 km levels in the past.
Quality has improved enough for some to call into question J.D. Power's long-running Initial Quality Study (IQS), which has functioned for 20 years as a kind of Oscar award program for new vehicle quality. Most of the major auto makers have made so much progress, in fact, some observers suggest the IQS does not offer a great deal to the consumer.
This is because the IQS compiles consumer complaints, based on a detailed questionnaire, about problems encountered during the first 90 days of ownership. It takes into account such things as the distinction between a "dead by the roadside" failure and a customer's dissatisfaction with certain design choices. Case in point: in years past, some German auto makers were hammered for offering poor cup holders.
In the 2007 IQS, Ford Motor Co.'s Lincoln brand scored 100 problems per 100 cars. That means, on average, buyers of new 2007 model Lincolns reported one problem per car to J.D. Power. Mercedes owners reported 111 problems per 100 cars.
Put another way, Mercedes owners identified, on average, 0.1 more problems with each individual vehicle than did the Lincoln owners. Of course, there is no such thing as a 0.1 problem. So the Mercedes score suggests that out of every 10 cars, nine had one problem and one had two.
This isn't such a big deal, considering that Mercedes has a 90-per-cent success rate when it comes to delivering a totally problem-free owner experience during the first 90 days. Not bad at all.
And the industry as a whole is doing a pretty good job. Across all brands, the average for problems per 100 cars in the IQS has hovered between 118 and 124 for the past four years.
Car makers, it should be noted, have cut the average number of problems in half twice in the 20 years since J.D. Power began publishing its survey results. The point is, today's buyer really needn't worry about a new car falling apart during its first three months on the road, which certainly wasn't the case 20 or 30 years ago.
Nor have quality gains been limited to luxury brands and Asian brands, such as Toyota and Honda, with traditionally high quality.
Hyundai Motor Co., once a quality laggard, now consistently scores among the very best in a wide range of quality studies. Ford, which battled through a series of embarrassing design and quality issues in recent years, has now jumped to the head of the pack among Detroit auto makers.
In fact, in its latest quality survey, Consumer Reports found that 41 of 44 Ford, Lincoln and Mercury models scored average or better in predicted reliability. The Ford Fusion and Mercury Milan (nearly identical to the Fusion but not sold in Canada) "are among the most reliable cars," Consumer Reports says.
David Champion, senior director of Consumer Reports' auto test centre, says Ford's quality remains below Toyota and Honda, but notes that Ford is now competing with those brands instead of with other Detroit-based manufacturers.
"They're definitely in what we would call the top tier," Champion says. "They are making serious inroads."
Ford is doing well, but not Detroit as a whole. Ninety per cent of the cars and trucks on Consumer Reports' list of the most-reliable vehicles are from Japanese manufacturers, not Detroit auto makers. Toyota still has more models on that list than any other auto maker and its Lexus brand remains the gold standard in quality.
And what Consumer Reports says definitely matters to new car buyers: there are four million subscribers to its print magazine and 2.7 million subscribers to its website. In 2005, Forrester Research Inc. found that Consumer Reports topped all other publications, websites and even advice from friends as a key source of car-purchase information.
Automotive researcher George Peterson of AutoPacific Inc., a market research company in Tustin, Calif., says survey data show Consumer Reports is in "the top three or four" influencers of car purchases in Canada. In focus groups about vehicles, "a high percentage" of consumers volunteer that they go to Consumer Reports first as they start car shopping.
Basically, Consumer Reports works as an early "filter" that helps buyers sort out the vehicles to reject, Peterson says.
While Consumer Reports has a huge impact, it is not the only quality arbiter or indicator available to today's car buyer. Plenty of other studies look at not only things gone wrong, but also things gone right, and even the emotional connection buyers have with their vehicles. Some studies aim to blend all these elements.
Take Strategic Vision's latest Total Quality Index (TQI). The San Diego, Calif.-based company measures overall new-vehicle owner satisfaction through all aspects of the ownership experience, including the buying process, brand loyalty and the overall perception of quality. A total of 166 attributes are gathered and then weighted by their emotional impact, to reach a final score on a 1,000-point scale.
The TQI is finding an audience because traditional quality is so strong across the industry.
Strategic Vision president Alexander Edwards says "perceived" quality, signalled by particular cues to consumers and figured in the TQI score, is having a greater impact on the purchase decision than it did historically.
"In the past, one could count the number of problems per vehicle, but for automotive customers today and tomorrow, a comprehensive and integrated perception of the ownership experience will be what drives the decision-making process," says Edwards.
The latest TQI arrived at some interesting results that reflect the changing nature of the car business. Hyundai's Entourage minivan tied with the Kia Sedona and Nissan Quest and they together replaced Honda's Odyssey as top pick in that category. The Odyssey had been a five-year winner in the Minivan category, so this is no mean feat.
Meanwhile, the Hyundai Azera placed at the top in the Large Car segment and the Hyundai Santa Fe sport utility vehicle took the top position in the Small SUV category.
Hyundai's achievements are interesting, but not overly noteworthy any longer. Hyundai has been scoring well in any number of recent quality studies, from Consumer Reports to J.D. Power and Associates. Hyundai is another auto maker now building consistently reliable vehicles, as well as pleasing ones.
Speaking of which, now that quality is becoming less of an issue, auto makers are finding it necessary to go beyond delivering a trouble-free ownership experience. This is where studies such as Strategic Vision's TQI and J.D. Power's own Automotive Performance, Execution, and Layout (APEAL) study come in.
The APEAL study specifically looks at how buyers connect with their cars on an emotional basis. High scores in the APEAL study tend to indicate consumer satisfaction and excitement with new models.
"Whether due to fresh designs or innovative features, APEAL scores tend to be highest for models when they are first introduced," says Neal Oddes, director of product research and analysis at J.D. Power and Associates, upon releasing the latest 2007 study.
"It's essential for manufacturers to get new-vehicle launches right, since vehicles with high appeal scores generally command a higher gross profit and sell more quickly," Oddes says.
Somewhere in between the APEAL study and the various "things-gone-wrong" studies is AutoPacific's Vehicle Satisfaction Awards (VSA). AutoPacific bases its awards on an annual measure of quality, customer service and, in general terms, "things gone right."
"Often times, the most satisfying vehicle is the one with the most personality, not the one that is screwed together the best," says AutoPacific's Peterson. Owner satisfaction can be improved by the way a brand and its dealers handle the repair of a defect, he adds.
Consumers can be forgiven if they feel confused by so many quality studies that look at a wide variety of different factors and come up with different results. So, I have combed through these various reports and studies in an effort to distill all the "best of" lists into one.
What's interesting is that this detailed examination of the latest studies reveals a telling degree of consistency among brands and models. In fact, a relatively small number of vehicles — out of the hundreds sold in Canada — consistently show up in study after study.
The Honda Civic, for example, is the winner, or a top-three pick, in the Compact car class in five of six studies examined here. For 2007, the Civic won the VDS, the IQS and the TQI, while scoring in the top three in the APEAL study. Consumer Reports also highly recommends the Civic, ranking it among the very best cars in its class. And the Civic resonates emotionally with owners who are thrilled to find that it rarely breaks.
Ford's Mustang boasts a similar story in the Mid-size Sporty sector. It has strong long- and short-term reliability and really excites owners with its styling and performance. And Consumer Reports gives it a strong recommendation.
The Lexus GS is another standout in the Mid-size Premium category. It has excellent quality and durability and also scores well in Power's APEAL survey of things gone right.
Similarly, the Honda CR-V among Compact Multi-Activity Vehicles (MAVs); the Chevrolet Corvette among Premium Sporty cars; and the Toyota 4Runner among Mid-size MAVs all score well in virtually every quality study examined here.
The accompanying list reflects the results of our survey of all six major quality studies — VDS, IQS, APEAL, TQI, VSA and Consumer Reports' top recommendations — and includes only those vehicles that appear in at least two separate studies.
Buyers who shop these vehicles first will be looking at models that score consistently well in different studies using different methodology.
So, this list is not a popularity contest. Rather, it reflects outstanding performance in the eyes of a wide range of arbiters.
You could do worse than buy one of these models.
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