http://www.usatoday.com/money/autos/...-quality_x.htm

U.S. automakers' brands get a bum rap
By David Kiley, USA TODAY


DETROIT — Ford Motor's Mercury is the most under-appreciated brand for quality, while Ford's Land Rover is the most over-appreciated, according to a report by Wall Street firm Morgan Stanley.

Mercury cars and trucks, like the Mountaineer, are under-appreciated for their quality.
Wieck

The firm used J.D. Power and Associates' 2003 Vehicle Dependability Study, which tracks reliability over three years, and CNW Market Research's Perceived Quality Survey to figure out which brands have the most opportunity to change customers' minds.

Top executives at U.S. automakers say they are spending money and time convincing buyers that their quality improvements are real, despite perceptions.


Wieck
Range Rover has British cachet but not the quality many people think.


The stakes are huge, says Morgan Stanley's senior auto analyst, Steve Girsky, because much of Detroit's spending on incentives is to make up for the automakers' poor quality images.

"Perceived quality may be a bigger driver of sales than actual quality, and Detroit has reputations to mend," he says.

Morgan Stanley compared the brands' scores in the Power measured quality study against the CNW scores for perceived quality to determine a percentage gap between the two.

Four of the top five under-appreciated brands — those whose actual quality is better than perceived — are from Detroit. But surprisingly, eight Japanese brands also are on the under-appreciated list, including quality leader Lexus.

Europeans crowded the list of over-appreciated brands — those whose perceived quality is better than actual. That included Volkswagen, whose well-crafted interiors and engines have attracted consumers despite several years of falling quality scores and difficulties in getting timely repairs.

VW Chairman Bernd Pischetsrieder says he prefers to be where he is — on the over-appreciated list. "I'd rather have an actual quality problem than a perceptual one, because we can fix the actual problem faster than the perceptual one."

Detroit automakers agree. "It will likely take two cycles of products to make headway, but we have to keep at it in our communications," says General Motors product boss Bob Lutz.

Says Chrysler Group CEO Dieter Zetsche, "We can get people's attention right away with better designs and better craftsmanship, but quality reputation takes about three times as long to get back as it takes to lose."

The biggest gainers in perceived quality between 1997 and 2003 were South Korea's Hyundai and Kia. And they both raised their market share — Hyundai went from 0.7% to 2.4% and Kia from 0.4% to 1.4%, according to Autodata. Each share point is worth about $1 billion per year in gross profit.

Meanwhile, the big losers in perceived quality were Mercury and Jeep, and both lost market share. Jeep went from 3.1% to 2.6%, while Mercury fell from 2.9% to 1.2%.

Kia's U.S. chief, Peter Butterfield, thinks his brand's perception actually lags the reality of its recent quality gains, even if it is ranked as over-appreciated.

Kia ranked dead last in Power's dependability study last year, although it improved in Power's Initial Quality Survey, measuring problems in the first three months of ownership, by 21%. Butterfield says he aims to be in the top 10 in the Initial Quality Study in three years.

While the under-appreciated brands have the opportunity to gain market share as perceptions improve, the over-appreciated brands face a potential minefield, Girsky says.

"Their market share and profitability could be at risk if consumers come to recognize the differentials."

Perception of car quality
Some car brands have better quality than buyers think. But for some brands, buyers think the quality is better than it is. Brands whose actual quality meets or exceeds perceived quality by percentage:
Mercury
42.3%
Infiniti 34.1%
Buick
29.7%
Lincoln
25.3%
Chrysler
20.8%
Lexus
17.4%
Porsche
14.2%
Oldsmobile
13.6%
Saab
12.2%
Acura
10.5%
Subaru
9.4%
Toyota
8.7%
Cadillac
8.3%
Nissan
5.2%
Jeep
3.5%
Suzuki
3.2%
Honda
1.2%
Ford 0%

Brands whose perceived quality exceeds actual quality by percentage:
Land Rover
75.3%
Kia
66.6%
Volkswagen
58.3%
Volvo
36.0%
Mercedes-
Benz
34.2%
Mitsubishi
34.1%
Hyundai
27.4%
Audi
26.4%
BMW
12.4%
Isuzu
8.5%
Dodge
7.4%
Saturn
7.3%
Pontiac
3.0%
Jaguar 3.0%
Chevrolet
1.8%
Mazda
1.2%
Source: Morgan Stanley

 

Well, that's an interesting point of view

I wonder if Pischetsrieder has figured out that actual problems will eventually turn into perceived problems many years down the road, if things aren't fixed quickly. And if I'm not mistaken, this problem at VW AG has been going on for a few years now.

 

Very interesting.

 

I was a little surprised to read that Chevy's PERCEIVED Quality EXCEEDED it's ACTUAL Quality! Even if only by 1.8%.

One wonders how they came up with these numbers.

"Damn lies and statistics" -Mark Twain

It's really hard to tell unless you know the process used to come up with these numbers. Overall it looks about right, but some things just come up fishy.

How do they rank perceived quality? Do they ask people just to rank manufacturers in order of quality? Is the distance between 1st & 2nd the same as between 16th & 17th? Because that's not the case with actual quality!

 

I run into these type of perceptions all of the time, especially with Japanese car owners, or fans, even some family members. Because of our disposable cars of the '70's and early '80's, a superiority complex has been burned into their brains. Especially b/c it seemed we couldn't make a reliable 4 cylinder engine for a while there. They forgot how those imports used to only have 60-90HP and rust apart faster than you could pay them off, especially Toyota trucks.(even their frames )
Now our cars exceed most but maybe a couple of models, yet I still hear them say how American cars suck, but Japanese cars are the BEST...
Perceptions ARE very hard to change, some advertising as to the "Improved Quality" would go a LONG WAY to changing them tho. It's a propaganda battle...

I remember when the Mercury Mountaineer first came out, I went to the Dayton Auto Show that year. I thought it was the BEST quality mid-sized SUV going, and I had them all right there to compare, even better than its sibling the Explorer. The Blazer would've looked much better w/o all that "cheap looking" light-gray plastic everywhere..

One "Under-Achiver" that's really surprising me, is Hyundai. In MY Opinion, they Honda last couple of years, except for those "perceptions...

 

The under-appreciated brands are still paying for their sins of 10 years ago, even though their new cars have improved.

Today new cars are all pretty good, and while consumers certainly care about quality, they can be swayed by a sexy new design or hot new motor because they know they are covered by warranty for a few years. So in the mind of the new car shopper, quality might drop down a few positions on their priority list if some other attribute came to the fore.

However used car shoppers mostly care about quality and reliability. And of the available pool of used cars out there, I think it's probably pretty true that the domestics lag their imported imported rivals.

In other words, when people are thinking of what cars are reliable, they are thinking of used cars, not new ones, and in that case the domestics are probably getting the ranking they deserve.