Counting Quality

It should come as no surprise that companies like Porsche, Jaguar and Infiniti make the top 5. These are companies that have a limited model range and sell vehicles for a premium.

The J.D. Power 2015 U.S. Initial Quality Study came out with a bit of a surprise this time.

For 2014, the top five finishers were Porsche, Jaguar, Lexus, Hyundai, Toyota.  In terms of the numeric spread, Porsche had a big lead in the “problems per 100 vehicles” (PP100).  It scored 74.  Jag was at 87.  Lower is better (i.e., fewer problems).

Then it went to 92 for Lexus, 94 for Hyundai, and 105 for Toyota.

But for 2015, while Porsche—for the third year running—was on top, it scored 80.  Which seems to indicate a bit of a slip.  Jaguar is again in the top five, but this time at #3, with 93.

It is #2 for 2015 which is a big surprise: Kia, with 86.

Note how the delta between Porsche and Jaguar in 2014 was 13 PP100.

The gap between Porsche and Kia is a mere 6 PP100.

Hyundai is #4 for 2015, at 95, and Infiniti rounds out the top five at 97.

Infiniti is almost as surprising as Kia because in the 2014 IQS it was at 128 PP100 and the industry average was 116 PP100.  From below average to the top five in the course of a year.

If we go further back in time, to the 2013 study, when Porsche was still #1, it is notable that Infiniti was #4, with 95 PP100.  So it tumbled down to 23rd place in 2014 and climbed up to #5 in 2015.  Quite an accomplishment.

It should be a surprise to no one that companies like Porsche and Jaguar and Infiniti make the top 5.  After all, these are companies that (1) have a limited model range and (2) sell vehicles for a premium.

But consider Kia and Hyundai.  They have—with the exception of pickup trucks—a full model lineup, from base models (Rio and Accent, respectively) to top-end models (K900 and Equus).

They are both mainstream manufacturers.  And while their sales numbers are still somewhat modest—last year, according to Autodata, Kia had 3.5% of the U.S. market and Hyundai 4.4%, so even combined, they are less than Honda’s 8.3% (and for those keeping score at home, in the 2015 IQS, Honda, with 111 PP100, tied Mercedes, and both just beat the industry average, 112 PP100)—they still dwarf the other three companies in the 2015 IQS.

That is, Porsche had 0.3% of the U.S. market, Jaguar 0.1%, and Infiniti 0.7%.

Think of it this way: the highest sales volume in the U.S. for Porsche in 2014 was the Cayenne, 16,205 units.  The highest volume for a Kia was the Optima, 159,020, nearly 10 times more.  So there are a whole lot more people to be picky about their “initial quality” experience.  (J.D. Power bases IQS on problems reported by vehicle owners during the first 90 days of ownership.)

This is not to minimize the accomplishment of Porsche.  It is exceedingly impressive how the company has been able to maintain its high quality.

(It is also making a boatload of money for the Volkswagen Group, but that’s another story entirely.  Or maybe it isn’t.  Isn’t it likely that there is a direct correlation between quality and profitability?)

When announcing the IQS results for 2015, Renee Stephens, vp of U.S. automotive quality at J.D. Power, said, “For so long, Japanese brands have been viewed by many as the gold standard in vehicle quality.”  This time, with an average of 114 PP100, the Japanese brands (1) tie the domestics, (2) are one point behind the Europeans, and (3) are 24 points behind the Koreans.  She continued, “While the Japanese automakers continue to make improvements, we’re seeing other brands, most notably Korean makes, really accelerating the rate of improvement.  Leading companies are not only stepping up the pace of improvements on existing models, but are also working up front to launch vehicles with higher quality and more intuitive designs.”

All that said, a disclaimer in the J.D. Power information ought to give a bit of pause: “Rankings are based on numerical scores and not necessarily on statistical significance.”

That said, there is certainly the significance associated with the bragging rights that companies will claim.  That is, consider Chrysler.  In terms of the overall nameplate IQS rankings, they are third from the bottom (with only smart and Fiat below).  Yet in the “Large Car” category, the Chrysler 300 takes the top.

I’m sure the lawyers at Chrysler’s ad agency are busy talking to the lawyers at J.D. Power for permission to run that in the next 300 ad.