Nissan North America Inc. is used to wowing the industry.
It did so when it announced that it was spending $1.4 billion to build and launch an auto plant in Canton, Miss.
Observers marveled at Nissan's ability to train an inexperienced work force to launch four vehicles, three of them in new segments for Nissan. They watched closely as the company orchestrated a new supply chain that included at least one key supplier that had never made auto parts before.
But in April, Nissan got some bad news. In one of the first industry report cards on the project, the marketplace was less than enthusiastic about Nissan's achievements in product quality.
The 2004 J.D. Power and Associates Initial Quality Study ranked Canton's first three nameplates at the bottom of their vehicle segments. Buyers of the Quest minivan, Titan pickup and Armada SUV reported the most problems in each of their segments.
In an era of Japanese-inspired obsession about product quality, the results raise eyebrows. Nissan has been one of the companies that has prodded the North American manufacturing community for 20 years to improve its quality.
|The 2004 J.D. Power and Associates Initial Quality Study ranked the first 3 nameplates launched by Nissan's Canton, Miss., plant at the bottom of their vehicle segments.|
|TITAN PICKUP||QUEST MINIVAN||PATHFINDER ARMADA SUV|
|Problems per 100 vehicles||166||243||209|
|Segment leader||Toyota Tundra||Honda Odyssey||Chevrolet Suburban|
|Segment leader's problems per 100 vehicles||90||111||84|
This year's survey polled 51,000 car owners about any problems encountered in the first 90 days of ownership.
The situation illustrates that the Japanese-style approach to automaking is no guarantee of high marks in an industry marketplace that is increasingly competitive about quality. It also shows that as companies enter product segments to deepen their roots in the U.S. market, they will face tough business situations.
Nissan management is taking the bad news from J.D. Power in stride. The automaker is reviewing all aspects of its operations to isolate the specific causes of the consumer complaints and find ways to correct them, says Dan Gaudette, Nissan North America's senior vice president for North American manufacturing and quality assurance.
"We're jumping in with both feet to address it," he says. "When we get these kinds of indications, we examine our whole business."
Gaudette says Nissan's response included some redesign or re-engineering work on some vehicle components. But he says such activity goes on all the time.
A bad J.D. Power report card is not the final word. Product glitches early in a vehicle program often are ignored by consumers who might be more motivated by a model's style or price. And vehicles often go on to have high consumer demand even with mediocre to poor published quality ratings. The Alabama-built Mercedes-Benz M-class SUV became Mercedes-Benz USA LLC's highest-volume product when it hit the market in the late 1990s. Power ranked it at the bottom of its class because of the number of reported quality problems.
Nissan is quick to point to another survey. AutoPacific Inc. has ranked the Pathfinder Armada highly. It also went out of its way to praise the new Canton-built Titan.
The AutoPacific report, which came out a week after the J.D. Power study, reads almost like a rebuttal. Explaining that its statistical sampling of the Titan was too small to count fully against rival pickups, AutoPacific instead awarded it an "Honorable Mention."
Manufacturing consultant Ron Harbour says Nissan faces a tougher perception challenge now, as it enters segments, than it did a decade ago as it built compact cars and pickups. Nissan's new offerings will face heavier scrutiny. That could have implications for Nissan's manufacturing efficiency. But Nissan has taken precautions, says Harbour, president of Harbour and Associates in Troy, Mich.
"The vehicles aren't setting the town on fire yet in terms of sales," he says. "But Nissan designed Canton as a flexible manufacturing system. It's not dedicated plant capacity. They can shift it around to build what's selling at the moment."
That appears to be the case. Gaudette says that the Infiniti QX56 has been selling above projections. It went on sale in January.
The Armada has had a slower start. The plant has made schedule changes to swap resources.
"For our customer," Gaudette says, "it might not be a particular quality issue. He just may not like it, because we are trying to be on the cutting edge with our product."