2008 J.D. Power Initial Quality Study: ****sche, Honda, Chevrolet

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****sche, Honda, Chevrolet Among Big Winners in 2008 J.D. Power Initial
Quality Study - Car News

GM and Ford do well, but Chrysler winds up near the bottom.

BY JOSEPH SZCZESNY
June 2008

For the third year in a row, ****sche came out on top in the J.D. Power
and Associates closely watched annual Initial Quality Survey (IQS) of
vehicles sold in the U.S. by three dozen top automotive brands. (The
complete rankings can be found on the next page of this article. Click
here.)

****sche, which makes its home in Stuttgart, Germany, came out as the
top automaker in the annual quality survey, while the Mercedes-Benz
plant in Sindelfingen just outside of Stuttgart was named the top
assembly plant. ****sche's Stuttgart plant, where the 911 cabriolet and
coupe are built, came away with a "Silver" award as one of the best
assembly plants in Europe, just ahead of BMW's Regensburg assembly
plant.

Overall, Mercedes-Benz moved up one place against last year from fifth
to fourth in the brand-level ranking, and three Mercedes-Benz models
were among the top three of their respective segments.

However, vehicles from General Motors, Ford, Toyota, Honda, and Nissan
also did well in the survey. For consumers, the survey is considered a
good predictor of owner****p experience throughout the life of a
vehicle, even though it measures buyer satisfaction after a vehicle
has been owned for just 90 days, officials from J.D. Power noted.

David Sargent, vice president of automotive research at J.D. Power's
vehicle group, said the 2008 results reflected a steady
"democratization of quality" across the industry. Japanese brands no
longer dominate key vehicle categories, noted Sargent, echoing
arguments domestic carmakers have been trying to make with only
limited success. "All of the manufacturers are doing a really good
job," Sargent said as he presented the 2008 survey results to the
Automotive Press Association in Detroit.

Individual Vehicle Accolades and Overall Improvement

The survey also highlights the best vehicle in 17 different segments,
ranging from subcompact passenger cars to full-size vans. No
manufacturer was tops in more than three categories, Sargent said.
However, Honda, which seems to be on a roll this spring, won in the
critical subcompact and compact car categories with the Fit and Civic
and in the compact activity vehicle with the CR-V. In addition, the
Chevrolet Malibu came away with top honors in the highly competitive
mid-size car category, much to the satisfaction of General Motors.

"Initial quality in the automotive industry has improved significantly
in 2008, with substantial gains demonstrated by nearly three-fourths
of the 36 ranked nameplates," Sargent noted. Overall quality improved
to 118 problems per 100 vehicles in 2008, down from 125 registered in
2007, added Sargent, who noted more than 81,000 consumers participated
in the poll.
"Due to some strong new-vehicle launches, in addition to a continued
reduction in the level of defects and malfunctions, overall quality
improved by six percent in 2008, compared with 2007," Sargent said.
"This gain is driven not only by strong advances from many of the high-
volume brands such as Chevrolet, Ford, and Toyota, but also by very
significant improvements by many other automakers.=94

Sargent added that the industry-wide improvement was driven by
automakers=92 efforts to listen better to customer opinions and
observations and to integrate the feedback into designing,
engineering, and manufacturing better vehicles.

Flaws Now Blamed More on Initial Engineering, Less on Assembly

Where assembly plants used to get a bad rap in earlier surveys, many
of the items buyers now find unappealing are design flaws that have to
be fixed upstream in the vehicle development process rather than
factory defects that are relatively easy to fix, Sargent said.
"Considerable work is needed in design quality," around the industry,
he said.

The introduction of new technology into a vehicle also is a challenge,
he said. There are a lot of complaints about the integration of sound
system and navigation screens. Manufacturers have to be aware of the
challenges as they offer the new technology, he said.

Tom Wilkinson, GM spokesman, said the IQS results generally indicate
GM's efforts to upgrade the company's models are working. "The Malibu
was the fourth-best car in the entire survey," even though it was a
brand new model, Wilkinson noted.

Meanwhile, Ford moved up to eighth place from tenth, while Mercury
moved up two spots to sixth place, just ahead of the Honda brand,
noted Ford officials. "For customers who make their purchase decision
based on quality, Ford, Lincoln, and Mercury vehicles must be on their
shopping lists," said Bennie Fowler, Ford group vice president, Global
Quality. "It is gratifying to see our commitment to quality paying off
in such recognition by J.D. Power and Associates," he said.

The one company that slipped, however, was Chrysler. Chrysler did have
the top vehicle in two different segments=97the Durango and Dakota
topped their segments=97but the Chrysler, Dodge, and Jeep brands were in
the bottom quarter overall among the 36 brands surveyed. The Jeep
brand, in fact, was dead last. The bottom tier also included brands
such as MINI, Land Rover, Saturn, Suzuki, and Saab.
Chrysler spokesman Ed Saenz acknowledged Chrysler needed to raise the
quality scores. "We're not satisfied," he said. "We know we need to do
better."