Autoblog

J.D. Power and Associates have lowered their U.S. sales light-vehicle forecast for 2008 to just 14.2 million units. This is the third time the global information services company have updated their numbers. In March, they announced that sales would not hit their initial 15.7 million estimate, instead they would come in at about 14.95 million units. Now, the company is estimating sales at 14.2 million units (the industry sold 16.2 million units in 2007). J.D. Power is citing the prolonged credit crisis, deteriorating economic conditions, and the high cost of fuel as reasons consumers are holding off on purchasing new vehicles. Not helping the matter, fleet sales (a common way for the automakers to boost sales in the past) are also down 21 percent from last year.

[Source: Automotive News, subs. req'd]

Anybody who has watched more than 30 minutes of television the past couple weeks has likely seen Ford's new ads claiming that the automaker has caught up to Toyota and Honda with regards to initial quality. Toyota certainly has, and it apparently doesn't like the Blue Oval's boastful tone. On Toyota's Open Road blog, Mike Michels seems taken aback at the claim, stating that the initial quality survey Ford cites was commissioned by the automaker and performed by a third-party company not affiliated with the well-known J.D. Power & Associates. He then spends a few paragraphs discrediting initial quality in the first place, citing J.D. Power figures that show the difference between the best and worst vehicles during the first few months of ownership were a mere .8 problems per vehicle. Of those problems, most of them were customer preferences and not actual issues that needed repair.

While we agree that initial quality is far from the complete quality story, it's incredible that Toyota would discredit a stat that has been a pillar of its own high quality image. The Toyota and Lexus brands have been among the leaders in initial quality for ages, which anyone would say is a result of great design, engineering and manufacturing. But now that other automakers are catching up, it seems Toyota wants to label initial quality as insignificant. Either way, we'll just have to wait another 3-5 years to find out if a Ford Fusion built today holds up as well as a Toyota Camry.

[Source: Toyota]

Ford's quality record at the beginning of this decade was so bad, the automaker was spending billions on warranty repairs, while simultaneously turning off potential buyers in droves. The blue oval has been righting the ship for the past couple of years, with vehicles like the Fusion and Taurus leading a quality renaissance that has the automaker nipping at the heels of its Japanese competition. That quality improvement has been cutting losses, with $900 million in savings achieved in 2007, and more on the way. The embattled automaker is forecasting an additional $300 in savings for 2008, which means Ford is expecting additional quality improvement. The money will eventually be used to finance new product, but for now the cash infusion is merely stemming Ford's substantial North American losses. There is little doubt that newer models like the Edge and Milan are far more reliable than what Ford was making even three or four years ago. The trick will be to convince the public to forgive Ford for its past woes and give the automaker another chance.

[Source: Detroit News]