2012 J.D. Power Initial Quality Study: Industry Hits All-Time High

June 20, 2012

The J.D. Power Initial Quality Study, a touchstone for the industry's current successes and failures in new-car design and production, shows that the industry has reached an all-time high in overall quality with its 2012 model year, improving five percent overall, presenting fewer defects and problems than ever.

Heavily influential, the report contains no real surprises this year, apart from the overall improvement, though Honda stands out for launching two new vehicles without the typical attendant rise in initial quality issues. This year, no one carmaker or brand proved especially dominant, with no more than three class awards going to any one brand.

In-car technology is perhaps the biggest story of 2012, playing a larger role than ever in the overall results, not due to problems, but due to its widely-expanded availability. With more technology in more cars, more owners are reporting problems.

J.D. Power's definition of quality used for the study explains what is being measured: the avoidance of defects or malfunctions, coupled with the avoidance of design problems, and overall product appeal--the emotional side of the customer's satisfaction with car's look, feel, and behavior. The study evaluates the problems owners find with new vehicles over the first 90 days of ownership.

Japan Holds Strong, America Improves But Lags Behind

Looking at the overall results by brand region, a few patterns emerge; among the top five, two are European, two Japanese, and one is American. Of the top ten, Japan holds the most spots, with Lexus, Honda, Acura, Infiniti, and Toyota taking half the field. Mazda finished the year in 11th.

American brands are a mixed bag. Cadillac tops the nation's quality, at fourth place overall, but you have to step all the way down to 12th to find the next U.S. brand, GMC, with 99 PP100, just edging out 14th-place Ram Trucks, also scoring 99 PP100. Chevrolet trails closely at 100 PP100 in 15th place, beating the industry average by two points. Next comes Buick in 17th at 106 PP100, then Lincoln at 20th, Jeep in 23rd, Chrysler in 25th, Ford in 27th, and finally Dodge in 29th.

As for Europe, the results are even more widely-spread than American brands. The top European brand, Jaguar, is also the most improved for the year, rising to second place with just 75 PP100, but Porsche, Mercedes-Benz, and BMW are the only others in the top 10--or the top 15. Audi is next in 16th, then Volvo in 20th. Land Rover, Volkswagen, MINI, Fiat and Smart make up all but two of the last-place positions in the industry, with Volkswagen and MINI the lowest-scoring manufacturers with more than one model on sale.

The Industry's All-Time Best Initial Quality

The overall industry average has improved from 107 problems per 100 vehicles (PP100) to 102 PP100--this is the highest initial quality level ever measured by J.D. Power, and it shows a rate of improvement that's at its highest since 2009. Comparing to the results of a decade ago, nearly every brand has made significant improvements, with an overall increase in quality of about 15 percent, while the spread from the best in the industry to the worst has narrowed.

A total of 26 brands have improved, while just five have declined, with one holding steady and two added (Fiat and Smart) for 2012.

Twenty-one model awards span 14 brands this year, with the most wins for a single brand at three, down from 7 for the most-awarded brand last year.

Lexus holds steady at 73 PP100, at the top of the industry, taking the win for the second year running. Jaguar is the most improved brand in the industry, reaching second place with 75 PP100, followed by Porsche at 75 PP100, Cadillac at 80 PP100, and Honda at 83 PP100.

Cadillac's gains this year came in large part from improvements to the SRX's powertrain and features. Honda's rate of improvement has slowed, but still gains against last year. The new Civic and new CRV were notable for not causing small increases in problems typical of new model launches.

BMW moves into the top 10 on a strong improvement, marked largely by maturation in design and functionality of its various high-tech systems. Past BMW scores have seen negative impact from some of its cutting-edge features, a hazard of leading development and introduction of new in-car technologies.

Ram trucks is above the industry average of 102 PP100 at 99 PP100. Chevrolet is above the mean, too, thanks largely to gains in the Cruze and Equinox, though many Chevy models have showed gains.

Below the industry average, there are still gains, particularly Jeep thanks to the Grand Cherokee, which suffered from typical launch-year issues last year. Chrysler fell back due in part to the launch of the 300. Land Rover and Dodge have improved, but remain near the bottom of the industry.

The two newest additions to the J.D. Power IQS, Fiat and Smart, are tied for last place in the survey, at 151 PP100. This result is magnified, says J.D. Power, due to the fact that both only offer one single model--so launch issues are brought to the fore. For the Fiat 500, the majority of issues are with functionality of interior elements. Smart's issues are glossed over--likely indicating a general distaste.

A total of 74,759 surveys were returned in this year's IQS, covering 34 brands and 209 models, with responses weighted on the basis of sales--the more of a vehicle is sold, the more it counts toward a brand's score.

In the study, 228 problems are documented, grouped into eight categories: Driving Experience, Interior, Exterior, Features/Controls/Displays, Engine/Transmission, Audio/Entertainment/Navigation, Seats, and HVAC (climate control systems).

Technology Rising To The Top

Technology is increasingly becoming an important factor in overall IQS score. Audio/Entertainment/Navigation comprises 16 percent of overall problems, up from 9 percent in 2006 and 12 percent in 2010. The problem isn't that the technology is getting worse--it's simply that it's becoming more widespread.

"Until recently, this type of sophisticated technology was found primarily on high-end models" said David Sargent, vice president of global automotive at J.D. Power and Associates. "However, over the past few years it has rapidly found its way into the automotive mainstream. For example, in 2012, more than 80 percent of owners indicate that their new vehicle has some form of hands-free technology."

Younger customers report more problems with technology than older customers. J.D. Power says this is due to higher expectations about ease of use and overall functionality--expectations likely set by their lifelong expo

e to consumer electronics.

Ford has taken a hard hit as a result, falling to 28th overall and 118 PP100, mostly due to problems with the MyFordTouch system with pre-update software. J.D. Power and Ford expect better results with the recently-released updated software once it spreads more widely through the equipped models.

Class Winner Highlights

The Mazda MX-5 tops its segment for sixth year out of seven, though with the entry of the 2013 Scion FR-S and Subaru BRZ for next year's study, it will be interesting to see if the mature MX-5 can continue its success against the widely lauded but brand-new cars from Toyota. The Lexus ES 350 repeats last year's class win, and remains one of the most consistently problem-free cars in its class. Ford's Mustang is the most frequent award recipient in its category, and improves this year, despite overall trends in Ford's MyFordTouch system.

Porsche 911 is best vehicle in its segment and in the industry--and quite likely the best quality vehicle J.D. Power has ever seen in the study, according to a J.D. Power spokesman. The Lexus LS is one of the very best vehicles in the industry, carrying on its last 20 years of results, and taking the number two overall initial quality spot in the industry for 2012. The Cadillac Escalade is the third-best vehicle in the industry this year, a very impressive result for Cadillac, which holds the fourth overall spot in initial quality for 2012.

Honda's new CR-V wins its segment, a very impressive result according to J.D. Power, as it's almost unheard of to do so in a launch year. The Honda Civic similarly performed surprisingly well for its first year on the market--though in both cases, critics might argue that the cars, while technically new, were so substantially similar to their predecessors that the results show a lack of change as much as successful new-car design or functionality.

In all, the results across classes, brands, and nations shows the industry as a whole is making vast strides toward producing overall high-quality vehicles. A few brands and models continue to struggle, but compared to the cars of 10 or 20 years ago, it's clear the automotive industry has made leaps and bounds across the board--and that can only mean good things for the car buyer.

(c) 2012, High Gear Media.

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