Auto Industry Defects Unchanged for 2000, But Brands Fluctuate.

Automotive Writers

SAN DIEGO--(AutomotiveWire)--May 2, 2000

While industrywide one in three new vehicle owners reported defects with their purchase, only 1 in 10 reported that they impacted their satisfaction on Strategic Vision's 2000 Problem Impact Measure(TM) (PIM).

[pilcrow (paragraph sign)] The San Diego-based research firm Tuesday released its study of the effects of things-gone-wrong on buyers' overall sense of satisfaction.

"We wanted to measure when a defect became a problem," said Strategic Vision Vice President Daniel Gorrell, "because we knew they were not the same thing for consumers. In traditional measures that simply count defects, a loose screw has the same impact as failed brakes. The industry has improved sufficiently to move beyond this."

Industry scores remained constant, but brand PIM scores varied widely. Lexus (4% of new owners) and Infiniti (5%) were the brands least impacted by problems, followed by Toyota (6%), Acura and BMW (both 7%). At the bottom were Suzuki (23% impacted), Cadillac (21%), Kia (19%), Daewoo and Isuzu (both 15%).

Kia improved the most (9 percentage points), followed by Lexus (7), Volvo (5) and Jeep (4). On the other end, scores slipped most for Cadillac (9 percentage points), Suzuki (7), Jaguar (4) and Saturn (4).

"Interestingly, many of those whose scores worsened had new models," said Gorrell. "These can have start up problems, though the new Infiniti I30, which was at the top of its segment, shows that some manufacturers can get it right."

The PIM figures in not only the percent reporting defects, but also how severe the defect was, whether or not it was repaired properly and promptly and what its impact was on new buyer satisfaction. It also considers owners' expectations, which will vary considerably among segments and brands.

Other findings of the study showed that:

-- Toyota was the best overall corporation (6% impacted), with most Toyota and
Lexus models at or near the top of their classes. Exceptions were Avalon and
Echo.

-- Models least impacted by defects were the Acura Integra, Honda CR-V,
Infiniti QX4 and Lexus LS 400, all at 3%.

-- Models most impacted by defects were the Cadillac Eldorado (59% reporting
defects; 29% impacted), Cadillac Seville (43; 29), Ford Focus (52; 23), GMC
Yukon XL (47; 20), Cadillac Escalade (52; 18) and Jaguar S-Type (50; 16).

-- While Volkswagen vehicles topped every segment they entered on Strategic
Vision's 2000 Total Quality Index(TM) (a measure of total satisfaction,
released last week), they were below the industry PIM average. Twelve percent
of its new owners were less satisfied with their purchase because of defects,
though 38% reported them.

-- New models with worse than average PIM scores were the Ford Focus (23%
impacted), Lincoln LS / Jaguar S-Type (16%/17%), Saturn LS (18%) and Cadillac
DeVille (17%).

"Cadillac's performance is a major blow for a brand that wants to improve its reputation in the luxury arena," said Gorrell. "All Cadillac models scored below their respective segment averages, and Cadillac had the worst PIM score of any luxury brand. Along with Buick, it had the biggest increase in reported defects from the same period last year."

The Problem Impact Measure(TM) is based on the responses of more than 41,000 new vehicle buyers. They purchased new models in October and November 1999, and had owned them at least 90 days.

This is the third year Strategic Vision has released its PIM scores. It also annually calculates its Total Quality Index(TM), measuring satisfaction with the complete ownership experience, Dealer Total Quality Index(TM), calculating how satisfied new owners were with their sales and service experience, and its Total Value Index(TM) that considers all of the economic issues.

For further information, contact Daniel Gorrell at 714/544-3466.