For many, the well-publicized quality woes at Toyota are a shock. After all, Toyota has long been the first choice of vehicle buyers who have been burned by other companies and dealers, and a perennial leader in quality rankings.
But a close look at some of the quality and safety rankings from firms like Consumer Union, J.D. Power and Associates and Insurance Institute for Highway Safety shows that while Toyota is undeniably among leaders in quality and safety, its actual lead over its rivals may be more perceived than real.
One of the most recognized quality rankings, which get echoed in automaker advertising, is the J.D. Power and Associates Initial Quality Study (IQS). The annual Power ranking, based on surveys of new-vehicle buyers, measures design problems and malfunctions during the first three months of ownership. And Power allows companies who score the highest rankings in their vehicle segment to advertise their #1 status.
In the 2009 IQS, Toyota received ten number-one ratings, more than any other company. While the rating does mean that Toyota has maintained a high standard for fit-and-finish of the vehicles, parts, design of controls and quality of ride, it does not tell the story, unless consumers peel the onion of the study, of how competitive other brands are against Toyota.
Toyota’s Lexus brand in 2009 was the overall top ranked brand with 84 problems reported per 100 vehicles. Toyota branded vehicles ranked 6th with 101 problems/per 100. Ford was ranked 7th at 102 problems/100, and Volkswagen, for example, was ranked 12th at 112 problems/100.
Debunk Car Rankings On Your Own
|So, what is the right process for a consumer shopping for a new vehicle to get the clearest picture of a company’s quality and the quality of the model they are shopping?|
|1. Assume nothing at the start unless you are have owned multiple models of one brand and have been dealing with the same dealer and are loaded with confidence and real-life experience you simply hope to perpetuate. Unless you are the type that simply buys one brand for life, put the companies on an equal footing in your mind and in your notebook.|
|2. Don’t let one source of quality ratings be the last word on your decision about quality.|
|3. Look at ratings from at least three sources, and look for consistencies or, inconsistencies, so your own final rating is balanced out.|
|4. Read at least three reviews of journalist vehicle testers, in addition to the ratings and reviews from sources like AOL Autos, Kelley Blue Book, IntelliChoice, J.D. Power and Associates and Consumer Reports.|
|5. When you go to a dealership to test drive a car, ask the sales person to leave you alone in the vehicle to familiarize yourself with all the functions. Make sure that you like the way all the controls work. And test drive for at least 30 minutes.|
|6. Make a checklist of all the things you want your car to do and have. If heated washer-fluid and a back up-camera are important, put it on the list. You may forget about it once the pressure of dealing with a salesperson begins.|
Put in real-life terms, a new Lexus typically has less than one problem to report per car in the first 90 days, and a 12th ranked VW has a little more than one problem per car reported. The difference could be one trip to the dealership in the first three months versus none for some Lexus owners. “The range of separation between Lexus and, say, the industry average, has definitely shrunk a lot,” says Raffi Festekjian, director of Power’s U.S. automotive practice. And Festekjian acknowledges that there are several “X factors” in survey results: such as the average age buyer of certain models. Many older buyers of models of Buicks, Mercedes-Benzes and Toyotas, if they aren’t practiced gadget users, for example, will tend to grade in-car entertainment systems harsher if they are not as adept at running them as more tech savvy drivers.
It Makes A Difference Being No. 1
The perception that is created, though, is huge.
“The appearance of a number-one ranking versus a number twelve ranking is very big to a consumer,” says independent marketing consultant Dennis Keene. “It is like an Olympic ski race where the separation between a Gold medalist who lands on a Wheaties box and a guy you never heard of is less than a second.”
The kinds of problems bedeviling Toyota these days (such as sticky accelerator pedals that show problems after a few years), and which have led to recalling millions of vehicles, are usually not the kinds of potentially lethal flaws that would even be picked up in a J.D. Power or Consumer Reports survey or vehicle test. A recent recall of the Toyota Prius hybrid, along with Lexus Hybrids, to correct a software problem that can lead to inconsistent braking, though, have shown up in consumer complaints during the first three months.
How about measuring total complaints, rather than just a survey sample? Analysis of National Highway Traffic Safety Administration records over the last decade shows that Toyota has been a leader in racking up relatively few complaints. Edmunds.com says Toyota ranked 17th out of 20 companies for the number of complaints as a proportion of total vehicles sold. Only three brands ranked better—Mercedes-Benz, Porsche and smart. Land Rover gets the highest number of complaints relative to vehicles sold.
Such data is useful for consumers trying to make the most rational choice they can if they tend to place quality and safety above issues like styling and brand preference.
But some experts believe that emotional connections to a brand, as well as reputation, can color even how honestly a consumer answers a survey in the first place.
“A reputation as strong as Toyota’s can cause survey respondents to lean favorably toward that brand when answering questions,” says Dan Gorrell of AutoStrategem, a firm that does survey-based research for car companies.
Gorrell notes that Toyota has consistently ranked among the most “trusted” brands in the industry. In an AutoStratagem survey in June 2009, over half of new vehicle intenders said that they “definitely trusted” the brand. More recent surveys conducted since the recalls and negative publicity began showing up show some fall off. “However, it is not apparent to that this damage is permanent,” says Gorrell.
There is an old saying that perception is reality. General Motors began researching this problem five years ago. Surveys of non-GM car owners showed that those consumers believed Chevrolet quality was about half that of Toyota despite rankings that showed most Chevy models lagging Toyota only slightly. Meantime, the same consumers believed Volkswagen’s quality was far ahead of Chevy’s even though it lagged far behind. This is why GM for the last year has been running a heavy schedule of ads that do little more than show how Chevy vehicles beat Toyota and Honda rivals on fuel economy. “We are very focused on advertising facts over feelings to get [influential] consumers,” says GM North America President Mark Reuss.
Toyota Showed Recent Loss In Quality Rankings
Quality is one thing, but how about safety ratings? In the IIHS’s most recent crash-worthiness ratings, Toyota did not win any Top Safety Pick awards, compared with the previous year when it won more than any other carmaker. It’s not that Toyota’s vehicles went from super safe to unsafe in one year, but rather that the IIHS changed its roof crush and frontal-impact testing methods, making them tougher to pass. Also, take a car like the Corolla. It might have scored a Top Safety Pick for 2010, except the new roof crush test has yet to be performed on the Corolla. Its scores on the other three crash tests that go into a Top Safety Pick are all “good.” If it scores “good” on the roof test, it will be earn top honors. But you have to dig for that information.
Consumer Reports is arguably the single most influential arbiter of quality and reliability. Its “Recommended” rating can often be the starting point for most consumers. If it’s not recommended, then a would-be buyer’s research may stop before it even reads reviews of the vehicle from sources such as Car and Driver or AOL Autos.
Recently, Consumer Reports, which takes no advertising in its magazine, suspended all of its recommended ratings for the Toyotas being recalled. “That may be the single biggest blow to Toyota’s reputation, which is why they have to get their arms around this problem fast and then try and get Consumer Reports to amplify the models going back on the recommended list if that proves to be the case,” says Dennis Keene.
Do the recalls indicate that Consumer Reports testing and methods are suspect? Car companies often complain about the magazine being too tough. The vehicle testing group at the magazine looks for incidents like “unintended sudden acceleration” happening in at least 1 in every 100 vehicles before it raises a red flag. The 2,262 reports to NHTSA over a ten-year period showed a rate of one in 10,000 vehicles.
One of the most important inquiries into Toyota by Congress and NHTSA will look at whether there has been a trend at Toyota to avoid recalls it should have been issuing while it tried to make what is known as “running changes” in vehicles. Automakers constantly examine complaints and problems reported by customers and dealer service departments, and make changes to parts and system that get implemented at the factor on newly built cars. The companies also issue “technical bulletins,” which indicate to service departments to replace the part when the vehicle comes in for service. But the company does not issue an actual recall.
If that is the finding, trust in Toyota could well be fractured. But if NHTSA raises the standards for when recalls are issued, other automakers, who act in similar fashion, will be brought to light as well.
Looked at in the whole, it is hard to make the case that Toyota is not a leading company in terms of quality. Most car companies have, in fact, studied Toyota’s processes and systems, in order to raise their own quality scores.
But what the recalls and a close examination of leading quality rankings does shed new light on is whether or not Toyota still enjoys a substantial edge over its rivals—enough to justify Toyota being a kind of automatic choice for people dissatisfied with Detroit, Korean or even European companies.
Because Toyota has built up a record of success and high rankings over the last 30 years, and reams of articles and books have been written about the company’s success, doesn’t mean the company is perfect or even enjoys the same advantage over other companies it once did. In the car business, a company is only as good as the last vehicle it sold to a customer.