J.D. Power and Associates Reports: The Vehicle Dependability
Gap Between Luxury and Higher-Volume Brands Narrows Significantly
Lexus and Toyota Models Each Rank Highest in Four Segments; Honda Models Rank Highest in Three Segments
WESTLAKE VILLAGE, Calif., Aug. 9 /PRNewswire/ -- The gap in long-term quality between luxury and non-luxury brands has been cut in half during the past four years, according to the J.D. Power and Associates 2006 Vehicle Dependability Study(SM)(VDS) released today.
The study, which measures problems experienced by original owners of 3-year-old (2003 model-year) vehicles, finds that there is an ever-smaller gap in reported problems between luxury and higher-volume brands -- averaging 15 PP100, down from 31 PP100 in 2003. Quality improvements with non-luxury brands are 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 underscores the shrinking dependability gap between luxury and non-luxury brands. While Lexus is the top-ranking brand in vehicle dependability for a 12th consecutive year and luxury-make Cadillac ranks fourth, three of the top five-ranking brands in vehicle dependability are non-luxury makes. Mercury and Buick, respectively, follow Lexus in the brand rankings, and Toyota ranks 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 J.D. Power and Associates. "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. 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 actual retail transaction data from the Power Information Network, a division of J.D. Power and Associates, sales made to loyal customers -- those who trade in the same nameplate as the one they purchase -- result in an average vehicle gross of $250 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.
"Perceptions about dependability can have a tremendous impact on an owner's satisfaction with their vehicle, which is no small matter for manufacturers," said 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 dominate the segment rankings. Lexus models lead 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 lead in their respective segments: Echo (sub-compact car), RAV4 (compact MAV), Highlander (midsize MAV) and Tundra (large pickup). Honda models rank 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 rank highest in one segment.
MINI and Kia are the most improved brands in the study, although both continue to rank below the industry average. MINI, which was first included in the VDS in 2005, earns a 103 PP100 (27 percent) year-over-year improvement. Kia has improved twice as much as any other brand in the past three years, improving 87 PP100 (22 percent) from 2005.
The 2006 Vehicle Dependability Study is based on responses from 47,620 original owners of 2003 model-year vehicles. For more information on vehicle ratings, visit the J.D. Power Consumer Center at www.jdpower.com .
2006 Nameplate 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 Top Three Models per Segment Car Segments Sub-Compact Car Highest Ranked: Toyota Echo Hyundai Accent Kia Rio/Rio Cinco Compact Car Highest Ranked: Honda Civic Toyota Corolla Toyota Prius Compact Sporty Car Highest Ranked: Mazda Miata Toyota MR2 Spyder Toyota Celica Midsize Sporty Car Highest Ranked: Chevrolet Monte Carlo Toyota Solara Ford Mustang Midsize Car Highest Ranked: Buick Century Buick Regal Mercury Sable Large Car Highest Ranked: Mercury Grand Marquis Ford Crown Victoria Buick Park Avenue Compact Premium Sporty Car Highest Ranked: Honda S2000 BMW Z4 Mercedes-Benz SLK-Class Entry Premium Car Highest Ranked: Acura CL Infiniti I35 (tie) Lexus IS 300/IS 300 SportCross (tie) Midsize Premium Car Highest Ranked: Lexus GS 300/GS 430 Acura RL Lexus ES 300 Large Premium Car Highest Ranked: Lexus LS 430 Cadillac DeVille Lincoln Town Car Premium Sporty Car Highest Ranked: Lexus SC 430 Chevrolet Corvette Ford Thunderbird Top Three Models per Segment Truck/Multi-Activity Vehicle (MAV) Segments Compact MAV Highest Ranked: Toyota RAV4 Subaru Forester Honda CR-V Midsize MAV Highest Ranked: Toyota Highlander Honda Pilot Buick Rendezvous Large MAV Highest Ranked: GMC Yukon/Yukon XL Chevrolet Suburban Toyota Sequoia Large Pickup Highest Ranked: Toyota Tundra Ford F-150 LD Ford F-250/F-350 Super Duty Midsize Pickup Highest Ranked: Ford Ranger Subaru Baja Toyota Tacoma Van Highest Ranked: Honda Odyssey Oldsmobile Silhouette Chevrolet Express (tie) Pontiac Montana (tie) Midsize Premium MAV Highest Ranked: Lexus GX 470 Lexus RX 300 Infiniti FX-Series Large Premium MAV Highest Ranked: Cadillac Escalade EXT Lexus LX 470 Cadillac Escalade/Escalade ESV About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 290 offices in 38 countries. Sales in 2005 were $6.0 billion. Additional information is available at http://www.mcgraw-hill.com .
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