J.D. Power and Associates Reports: Domestic Brands Surpass Imports in Initial Quality for the First Time in IQS History

Domestic auto brands, as a whole, have demonstrated higher initial quality than import brands for the first time, according to the J.D. Power and Associates 2010 U.S. Initial Quality Study(SM) (IQS) released today. The study has been conducted annually for the past 24 years.

Overall, the industry average for initial quality is 109 problems per 100 vehicles (PP100) in 2010, increasing slightly from 108 PP100 in 2009. However, initial quality for domestic brands as a whole has improved by 4 PP100 in 2010 to an average of 108 PP100—slightly better than the initial quality of import brands, which averages 109 PP100 in 2010.

Substantial improvements by many domestic models—including the Ford Focus, Ram 1500 LD and Buick Enclave—drive the overall improvement of domestic automakers in 2010. In particular, initial quality of Ford models has improved steadily for the past nine years. In addition, as a corporation, Ford Motor Company (including Volvo) has 12 models that rank within the top three in their respective segments in 2010—more than any other corporation. General Motors Company has 10 models that rank within the top three in their segments.

Initial quality performance demonstrated by U.S. brands in 2010 contrasts sharply with consumer sentiment from one year ago. According to data collected by the J.D. Power Web Intelligence Division between May and July 2009, much of the online consumer discussion about automotive quality centered around the difficulties U.S. automakers were facing, and perceptions that these problems were largely caused by poor product quality.

"Domestic automakers have made impressive strides in steadily improving vehicle quality, particularly since 2007," said David Sargent, vice president of global vehicle research at J.D. Power and Associates. "This year may mark a key turning point for U.S. brands as they continue to fight the battle against lingering negative perceptions of their quality. However, there is still a long road ahead, and domestic manufacturers need to consistently prove to consumers that they can produce models with quality that equals or beats that of the import brands. Achieving quality comparability is the first half of the battle; convincing consumers—particularly import buyers—that they have done this is the second half."

According to J.D. Power's Web Intelligence Division, online consumer conversations about vehicle quality have recently shifted to a more concrete tone. In 2010, consumers are more often discussing quality as it applies to their own personal vehicle purchase decisions, rather than how domestic brands overall are affected by perceptions of low quality.

Initial quality of new models and major redesigns continues to improve in 2010, led by new launches from Ford, Honda, Lexus,Mercedes-Benz and Porsche.

The all-new Honda Accord Crosstour and the redesigned Ford Mustang, Ford Taurus and Lexus GX 460 each rank highest in initial quality in their respective segments. The Ford Fusion, Mercedes-Benz E-Class Coupe and Sedan and Porsche Panameraalso launch with notably high initial quality levels.

Historically, newly launched models have incurred substantially more quality problems than carryover models, on average. However, more than one-half of all models launched during the 2010 model year perform better than their respective segment averages. Furthermore, 12 all-new and redesigned models rank within the top three in their respective segments. Meanwhile, initial quality of carryover and freshened models has declined for the 2010 model year.

"With automakers committing huge budgets for the design, engineering, production and marketing of all-new models and major redesigns, hitting the quality mark out of the gate is critical," said Sargent. "Getting initial quality right on model launches can serve dual purposes for automakers—boosting profitability and also inspiring consumer confidence in the overall quality of their models. Having a strong quality image is essential for automakers to be able to compete in today's market—both in the U.S. and around the globe."

The Initial Quality Study serves as the industry benchmark for new-vehicle quality measured at 90 days of ownership. The study is used extensively by manufacturers worldwide to help them design and build better vehicles and by consumers to help them in their vehicle purchase decisions. Initial quality has been shown over the years to be an excellent predictor of long-term vehicle durability, which directly impacts consumer purchase decisions. The study captures problems experienced by owners in two distinct categories—design-related problems and defects and malfunctions.

2010 IQS Ranking Highlights

Porsche leads the overall nameplate rankings, averaging 83 PP100. Following in the rankings are, respectively, Acura (which moves from 14th rank position in 2009 to second in 2010), Mercedes-Benz (which improves from sixth rank position in 2009 to third in 2010), Lexus and Ford (which moves into the top five for the first time since the inception of the study). MINI posts the largest improvement in 2010, reducing problems by 32 PP100 from 2009.

Toyota's problem count increases by 16 PP100, moving it from sixth rank position in 2009 to 21st in 2010.

"Clearly, Toyota has endured a difficult year," said Sargent. "Recent consumer concerns regarding Toyota's quality are reflected in the nameplate's performance in the 2010 study. That said, Toyota's success was built on a well-deserved reputation for quality, and there is little doubt that they will do everything possible to regain that reputation."

Ford and Lexus each garner three segment awards. Ford captures awards for the Focus, Mustang and Taurus, while Lexus receives awards for the GS, GX and LS models. The Lexus LS has the fewest quality problems in the industry, with just 55 PP100.

Chevrolet, Honda and Toyota receive two awards each. Chevrolet models earning awards are the Avalanche (in a tie) and theTahoe. Honda receives awards for the Accord and the Accord Crosstour, while Toyota receives awards for the FJ Cruiser andSienna.

Also receiving segment awards are: Acura RDX, Cadillac Escalade, GMC Sierra LD (in a tie), Hyundai Accent, Mazda MX-5 Miata, Mercedes-Benz C-Class, Nissan Frontier, Scion xB and Volvo C70.

Assembly Plant Awards

The Daimler assembly plant in East London, South Africa, receives the Platinum Plant Quality Award for producing vehicles yielding the fewest defects and malfunctions. The plant, which averages just 28 PP100, produces the Mercedes-Benz C-Class. Plant awards are based solely on average levels of defects and malfunctions and exclude design-related problems.

Among North and South American plants, the Toyota Motor Corporation plant in Cambridge South, Ontario, Canada, which produces the Lexus RX, achieves the Gold Plant Quality Award.

In the Asia Pacific region, Toyota Motor Corporation's Kyushu 2, Japan, plant, which produces the Lexus ES, IS and RX, receives the Gold Plant Quality Award.

The 2010 Initial Quality Study is based on responses from more than 82,000 purchasers and lessees of new 2010 model-year vehicles surveyed after 90 days of ownership. The study is based on a 228-question battery designed to provide manufacturers with information to facilitate identification of problems and to drive product improvement. The study was fielded between February and May 2010. Visit the J.D. Power Business Center for additional information on J.D. Power's automotive research.

Top Three Models per Segment

Car Segments

Sub-Compact Car

Highest Ranked: Hyundai Accent

Toyota Yaris

Honda Fit

Compact Car

Highest Ranked: Ford Focus

Honda Civic

Hyundai Elantra

Compact Sporty Car*

Highest Ranked: Mazda MX-5 Miata

Scion tC

Compact Premium Sporty Car*

Highest Ranked: Volvo C70

Mercedes-Benz E-Class Coupe

Entry Premium Car

Highest Ranked: Mercedes-Benz C-Class

Acura TL

Cadillac CTS

Midsize Premium Car

Highest Ranked: Lexus GS

Mercedes-Benz E-Class Sedan

Volvo S80

Midsize Sporty Car*

Highest Ranked: Ford Mustang

Dodge Challenger

Large Premium Car

Highest Ranked: Lexus LS 460

Mercedes-Benz S-Class

Porsche Panamera

Midsize Car

Highest Ranked: Honda Accord

Ford Fusion

Chevrolet Malibu

Large Car

Highest Ranked: Ford Taurus

Buick Lucerne

Nissan Maxima

NOTE: For a segment award to be issued, there must be at least three models with sufficient sample that comprise 80 percent of market sales within an award segment.  There were only two premium sporty models and no large van models with sufficient sample size, thus no premium sporty or large van awards have been issued.

*No other model in this segment performs above the segment average.

Top Three Models per Segment

Truck/Multi-Activity Vehicle (MAV) Segments

Compact Crossover/SUV

Highest Ranked: Toyota FJ Cruiser

Honda CR-V

Honda Element

Compact MPV

Highest Ranked: Scion xB

Chrysler PT Cruiser Wagon

Nissan Cube

Entry Premium Crossover/SUV

Highest Ranked: Acura RDX

Volvo XC60

Midsize Crossover/SUV

Highest Ranked: Honda Accord Crosstour

Honda Pilot

Ford Edge

Large Crossover/SUV

Highest Ranked: Chevrolet Tahoe

Chevrolet Suburban

GMC Yukon

Midsize Premium Crossover/SUV

Highest Ranked: Lexus GX 460

Infiniti FX-Series

Volvo XC70

Large Premium Crossover/SUV

Highest Ranked: Cadillac Escalade

Mercedes-Benz GL-Class

Infiniti QX56 (tie)

Land Rover Range Rover (tie)

Large Pickup

Highest Ranked: Chevrolet Avalanche (tie), GMC Sierra LD (tie)

Ford F-150 LD

Midsize Pickup

Highest Ranked: Nissan Frontier

Ford Ranger

Ford Explorer Sport Trac

Minivan

Highest Ranked: Toyota Sienna

Kia Sedona

Dodge Grand Caravan

NOTE: For a segment award to be issued, there must be at least three models with sufficient sample that comprise 80 percent of market sales within an award segment.  There were only two premium sporty models and no large van models with sufficient sample size, thus no premium sporty or large van awards have been issued.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies:

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a global information and education company providing knowledge, insights and analysis in the financial, education and business information sectors through leading brands including Standard & Poor's, McGraw-Hill Education, Platts, and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2009 were $5.95 billion. Additional information is available at http://www.mcgraw-hill.com/.