FRANKFURT -- Following a string of embarrassing quality setbacks this year, the German auto industry is closing ranks in a continued struggle to regain a reputation of building the world's best engineered cars.
The VDA industry association presented an agreement among leading executives on Thursday that called for common guidelines for carmakers and suppliers to uphold quality standards while pledging not to blame each other in public for mistakes.
"This (commitment) goes way beyond lip-service," VDA President Bernd Gottschalk told reporters.
The document, which the VDA called "unique" throughout the industry, comes as companies such as Volkswagen and DaimlerChrysler are trying to repair dents to the image that "Made in Germany" means top-notch quality.
"Innovation and premium quality are the cornerstones for the leading position of German carmakers and suppliers in the global market," the document states in its preamble.
The aim is to improve communication and cooperation, as well as assign clear roles and responsibilities to the various parties involved in product development and production process.
The commitments are the result of two years of intensive discussions and were signed personally by leading executives including VW Chief Executive Bernd Pischetsrieder, BMW CEO Helmut Panke and Mercedes Car Group chief Eckard Cordes.
The increasing complexity of new products, the expansion into ever more differentiated segments and the globalization of the supply chain have created a new awareness among managers in the industry as to the challenges they face.
"This doesn't necessarily mean just spending more money," said VDA's managing director Thomas Schlick. "Rather this issue has to be anchored in the heads of the people involved," he continued, adding that quality must be a key issue very early in product development.
In an industry beset by overcapacity and incentive wars, high quality remains one of the best ways to boost brand image, car sales and margins.
Recent news has not been kind to German carmakers, included a very public dispute between Mercedes and BMW and one of their key suppliers that made headlines for days.
Daimler's luxury arm Mercedes Car Group recalled 1.3 million cars earlier this year due to shortcomings in quality in the largest such action in its history.
Robert Bosch GmbH, the world's largest automotive supplier, delivered shipments of shoddy diesel fuel-injection pumps in early 2005 to virtually every German carmaker.
Both Mercedes' Sindelfingen plant and BMW's factory in Dingolfing ceased production for days due to the defective parts.
Mercedes directly blamed Bosch for a slump in its car sales earlier this year and has reportedly demanded compensation from Bosch for the impact.
BMW, meanwhile, made a veiled threat to seek compensation in future. Panke said the company would first solve the problem and then talk about who would pay.
To make matters worse, a study on vehicle dependability conducted by research firm J.D. Power among U.S. drivers concluded German brands significantly lagged competitors on quality.
The study, published on Wednesday, showed that only Porsche continued to set standards. Porsche finished second out of 37 brands ranked, but BMW managed only 11th, while Mercedes finished 27 in the list.
Audi was ranked 31 and its sister brand VW was punished with 34th place out of 37 brands.
Even in its own home market of Germany, buyers said they were more satisfied driving Japanese cars than an Audi, Mercedes or Volkswagen, according to a another J.D. Power survey this week.