If you look at "Things Gone Right" and "Things Gone Wrong," things seem to be going pretty well for U.S. automakers after decades of quality problems and questionable designs.
There are growing signs that U.S. motorists are taking a closer look at domestic iron — and that they’re starting to like what they see.
Ford, General Motors and, to a lesser degree the struggling Chrysler, have all been faring unexpectedly well in a series of recent studies designed not just to measure quality but whether a maker’s products surprise and delight the customer. Significantly, Detroit makers have exceeded their Asian rivals on both counts, lately.
The 2010 APEAL (Automotive Performance, Execution and Layout) study by J.D. Power and Associates looks at what the industry likes to call “Things Gone Right,” or TGR. The products that score well are those that satisfy their owners with good design, solid performance, unexpected fuel economy and a variety of well-executed creature comforts.
For the first time since 1997, domestic brands surpassed their import rivals, notes David Sargent, Power’s chief analyst. The Big Three, he added, “have performed three important actions during the past two years that have led to their gains. Firstly, they have retired many models that demonstrated low appeal. They have also introduced new, highly appealing models to their lineups, and finally, they have improved their existing models through freshening and redesigns.”
While a good showing in a single study might be dismissed as a fluke, Detroit makers also scored a slam dunk in another TGR-style study, the Ideal Vehicle Awards from another California market research firm, AutoPacific, Inc. The IVA aims to uncover what AutoPacific President George Peterson describes as the vehicles “owners would change the least.”
Detroit fielded winners in 16 of 27 vehicle segments, including products like the new Ford Taurus SHO and the big Ford F-150 pickup. European makers claimed six segment winners, with Japan taking only five. The Koreans, despite gaining sales and showing big improvements in quality, were shut out entirely in the 2010 IVA.
There’s little doubt that Detroit’s improving quality has played a big part in increasing the domestic industry’s overall appeal. For the first time ever, the Big Three outscored their import rivals in another closely watched J.D. Power survey of owners, the Initial Quality Study. The 2010 IQS, released a month ago, is a more traditional Things-Gone-Wrong, or TGW, analysis, specifically looking at what the industry euphemistically calls “problems” with individual vehicles.
Problem gaps narrow
A couple decades ago, owners of domestic products typically reported double, triple, even four times more problems with their cars, trucks and crossovers compared to Asian buyers. The gap has been narrowing fast, in recent years, and for the 2010 models, the typical Detroit product averaged 108 problems per 100 vehicles — 108 PP100 in Power-speak — compared to 109 for the imports. Statistically insignificant? Perhaps, but a huge reversal of fortunes, and one more clear indicator of a larger trend.
Of course, the imports haven’t been helped, on the whole, by Toyota’s recent problems. The embattled Asian automaker dropped from sixth to 21st in the new IQS, and it didn’t fare any better in Power’s newest APEAL. It ranked 32nd in the study, ahead of only Jeep, one of the most troubled domestic brands.
Toyota has never been a strong player in Things-Gone-Right studies. As analyst Peterson says, it is a relatively “plain vanilla” brand, which has traditionally gained ground based on a solid reputation for quality, reliability and resale value. But as those slip, it is clearly having an impact.
“Toyota was the only major manufacturer (other than Chrysler) not up by double digits” during the first three months of 2010, noted Jeffrey Anderson, Director of Consulting & Analytics for Experian Automotive, which analyzed the first quarter’s U.S. new vehicle registration numbers.
Anderson cautioned that Toyota is still “conquesting” former Big Three customers, but other industry analysts believe that things may be starting to go the other way. More significantly, Toyota is not the only maker losing steam as Detroit makers, Ford and GM in particular, increase their overall appeal.
“Our competitive set is expanding,” boasts Ford’s global marketing chief, Jim Farley, adding that the maker’s dealers are seeing “increased cross-shopping,” not only with Toyota but with other import brands.
Another factor is likely to influence the trend: resale values. Traditionally, Detroit makers tended to lag their rivals, especially in key segments like midsize sedans. The difference could add up to thousands of dollars at the end of a three-year cycle. That was a strong factor for many buyers who based their decisions on hard numbers and less on emotional factors.
But now, with Detroit gaining on all fronts, domestic brands are starting to win both hearts, minds – and pocketbooks.