Quality Ratings Have Little To Do With Car Sales

J.D. Power released its initial quality auto survey for this year which is based on questions put to 78,000 motorists. The headline most of the media carried about was that the Ford name plate dropped from the No.5 position last year to No.23. This was, according to J.D. Power, because of problems with the MyFord Touch software system which is installed in many of Ford’s vehicles.

Toyota’s (NYSE: TM) Lexus was at the top of the list, followed by Honda (NYSE: HMC). It is notable that these quality ratings have no correlation with sales. Mazda, for example, was in the top five name plates based on initial quality, and it cannot give cars away. Two of VW’s products were in the top three spots in the “compact sporty vehicle” category. VW’s US sales are small. Acura also did well in the survey, although its sales are routinely behind those of other luxury brands. Lexus, once the top luxury car by market share, has  fallen behind Lincoln, Mercedes, and BMW.

Mazda sold only 103,072 vehicles in the US in the first five months of the year, which gives it a market share of 2%. VW’s market share is only 3%. The fastest-growing car brands in the US are Hyundai and Kia, neither of which did did particularly well in the J.D. Power study. Only the Kia Rio and Hyundai Equus were singled out for their quality. Ford’s sales reached 876,321 in the first five months of the year–up 12%. TrueCar expects Ford’s sales to rise 15% in June, which is a pace which would be faster than the overall market. Its share should hit nearly 18% which would put it close to GM’s

It may well be that quality research data is not at the core of purchasing decisions. Features, brand equity, price, and overall press coverage are probably much more important. VW has made a mighty push into the US market to move into the No.1 position in the car manufacturing ranks. It has had almost no success. Hyundai has probably done well in part because of its extraordinarily generous warranty package.

The J.D. Power ratings will stay in the public’s mind for a few days, or even weeks. Then, one of the car companies will offer zero percent financing, and buyers will rush to its showrooms

Douglas A. McIntyre