J.D. Power: vehicle dependability rises 4.6%

Vehicle dependability has improved 4.6 percent across the auto industry in 2008, according to a new study by J.D. Power and Associates.

The 38 brands included in the survey averaged 206 problems per 100 cars sold during the third year of ownership. That’s 10 fewer problems than in 2007.

Lexus again led the industry in the study, which is based on results of a survey of 52,000 original owners of 2005 model vehicles. There were 120 problems per Lexus sold, Power said. Lexus has been atop the vehicle dependability study for 14 years.

Power said it found that customers are much less likely to recommend a vehicle if they experience significantly more problems during the third year they own it compared with the first 90 days. Customer satisfaction increased for those models that had problems per 100 vehicles sold increase by less than 35 percent.

“There is an overwhelming relationship between dependability and satisfaction,” said David Sargent, vice president of automotive research at Power.

It’s important that customer satisfaction stays high after owning a vehicle for three years because that’s around the time when people start thinking about buying a new car, Sargent said. If someone isn’t satisfied with a vehicle, the owner is less likely to buy that same model or brand.

Every vehicle shows increases in problems by the third year compared with the first 90 days of ownership.

“The ability of the manufacturer to minimize that quality deterioration has a profound effect,” Sargent said. “The love of the vehicle actually blossoms over time.”

That bodes well for brands such as Mercury -- whose problems per 100 vehicles sold rose 25.8 percent from the 2005 Power initial quality study -- and Acura, whose rate of problems increased 37.9 percent.

Those two brands had the lowest increases in problems per 100 vehicles. The Acura MDX, Mercury Monterey and Mercury Sable had the lowest problem increases, Sargent said. The problem rates for each nameplate grew less than 5 percent.

The industry averaged a 74.5 percent increase in problems per 100 vehicles sold.

The top five brand performers (problems per 100 vehicles sold in parentheses):

1. Lexus (120)

2. Mercury (151)

3. Cadillac (155)

4. Toyota (159)

5. Acura (160)

And the worst:

33. Saab (254)

34. Isuzu (274)

35. Kia (278)

36. Suzuki (302)

37. Land Rover (344)

Note: Maserati was not included in the totals because of a small sample.

PRESS RELEASE: J.D. Power and Associates Reports

Deterioration in Vehicle Quality During the First Three Years of Ownership

Has a Major Impact on Customer Satisfaction and Advocacy

Lexus Ranks Highest in Vehicle Dependability for a 14th Consecutive Year

WESTLAKE VILLAGE, Calif.: EMBARGOED UNTIL 7 AM EDT Thursday, August 7, 2008 — Deterioration in vehicle quality during the first three years of ownership—determined by comparing long-term dependability rates to initial quality problem rates—strongly affects overall customer satisfaction as well as customer willingness to recommend their vehicle model, according to the

J.D. Power and Associates 2008 Vehicle Dependability StudySM (VDS) released today.

The study, which measures problems experienced by original owners of 3-year-old (2005 model year) vehicles, finds that, on average, customers report experiencing 75 percent more problems in the third year of ownership than during the first 90 days. Those models with the largest increase in problem levels show the most pronounced declines in satisfaction and the likelihood of owners to recommend their vehicle model. In addition, while no model has fewer reported problems in the third year of ownership compared with the first three months, those models that average less than 35 percent problem growth actually demonstrate improvement in overall satisfaction during the three-year period.

“Understanding and minimizing quality deterioration is critical for manufacturers, as it is a key driver of owner satisfaction and word of mouth recommendations,” said David Sargent, vice president of automotive research at

J.D. Power and Associates. “It is imperative that manufacturers design models that not only achieve high levels of initial quality but also attain high levels of longer-term dependability. Vehicle models that stand the test of time will help automaker profitability through superior owner satisfaction and recommendation rates.”

The study also finds that five of the top 10 problems reported industry-wide in the 2008 Vehicle Dependability Study were also among the top 10 most frequently reported problems in the 2005 Initial Quality Study, suggesting that the problems are identified by owners during the initial ownership period, but have not been rectified by automakers during the three-year ownership period.

The problems include:

1. Excessive wind noise

2. Noisy brakes

3. Vehicle pulling to the left or right

4. Issues with the instrument panel/dashboard

5. Excessive window fogging

“Although automakers have achieved tremendous gains in initial quality and dependability in recent years by specifically addressing customer concerns, these particular problems still prove challenging for manufacturers,” said Sargent. “The fact that these problems have endured throughout the industry for many years suggests that additional focus on these issues prior to vehicle launch would benefit not only consumers, but also automakers through increased customer satisfaction.”

For a 14th consecutive year, Lexus ranks highest in vehicle dependability, improving by 25 problems per 100 vehicles since 2007 to achieve a score of 120 PP100. Following in the top five rankings are Mercury, Cadillac, Toyota and Acura, respectively.

In addition, Lexus garners six segment awards—the most of any nameplate in 2008—for the ES 330, GX 470, IS 300, LS 430, LX 470 and SC 430. Toyota follows with five segment awards for the Highlander, Prius, RAV4, Sequoia, and Tundra. Ford and Honda each capture two awards. Ford models receiving awards are the Crown Victoria and Ranger, while Honda earns awards for the Element and S2000. Models by Buick, Chevrolet, Hyundai, Mazda and Mercury each rank highest in one segment.

SAAB is the most improved brand in the study, although it continues to rank below the industry average. SAAB improves by 65 PP100 since 2007.

The study finds that long-term vehicle quality has improved by 5 percent industry-wide in 2008—with an overall decrease of 10 problems per 100 vehicles—compared with 2007. More than 60 percent of the 38 nameplates included in the study improve in 2008, compared with 2007. Among the 19 segments included in the study, the midsize premium MAV segment demonstrates the most improvement in 2008—36 PP100 fewer than in 2007. The compact car and midsize car segments also have much lower problem levels in 2008 than in 2007, and together account for more than one-half of the overall industry improvement.

“The gains in dependability for compact and midsize vehicles are good news for consumers who are downsizing their vehicles due to increasing fuel prices,” said Sargent. “Consumers who purchase these smaller vehicles benefit not only from immediate gains in fuel economy, but also from improvements in long-term dependability, compared with previous years.”

The 2008 Vehicle Dependability Study is based on responses from more than 52,000 original owners of 2005 model-year vehicles. The study was fielded from January through April 2008.

Find more detailed findings on vehicle dependability as well as model photos and specs by watching a video, reading an article and reviewing brand and segment dependability ratings at JDPower.com.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. 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 (NYSE: MHP) 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 280 offices in 40 countries. Sales in 2007 were $6.8 billion. Additional information is available at http://www.mcgraw-hill.com.

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