Auto Reliability – Manufacturer Product Quality Change in the US Car Market From 1992 to 2010

Each year the Consumer Reports magazine publishes a list of used cars to avoid based on serious problems reported by its subscribers. This list encompasses convertibles, coupes, sedans, hatchbacks, wagons, minivans, sport-utility vehicles with both truck and car frames, and pickup trucks. It identifies these vehicles by model and model year.

The difference between an automobile manufacturer's share of entries on this list in 1992 and its share in 2010 provides one measure of a manufacturer's change in product quality. One limitation of this measurement is that it indexes product quality change only for those automotive models that fall at the lower or bottom end of a manufacturer's product line. Another limitation is that it does not take account of the large increase in the number of vehicle model offers and automobile sales by manufacturers based in Europe and Asia that has occurred from 1992 to 2010, which should have occurred some decline in the shares of the three large US-based manufacturers if their quality at the lower end has remained rather constant. Nonetheless, it is a useful guide for rough gauging improvement or decline in quality.

The foregoing measure agreements Ford Motor Company the greatest change in product quality. Ford's share of CR's list of used cars to avoid fell from 23% in 1992 to 10% in 2010. This gives Ford a 13 percentage point improvement over the 18-year period. The magnitude of this change, combined with the absence of similar changes by the other two US-based manufacturers, suggests significant improvement in the quality of Ford's vehicles at the lower end of its quality spectrum.

Volkswagen AG has had the second greatest change by this measure. Its share of CR's list of used cars to avoid rose from 2% in 1992 to 11% in 2010. This gives Volkswagen a 9 percentage point drop in quality over the period, although some of the percentage point change may reflect an increased model offering in the US, or an increase in US sales of existing models sufficient to provide the consumer survey data necessary to rate more of the existing models, or both.

The Chrysler group has had the third greatest change. Its share of CR's list of used cars to avoid fell from 25% in 1992 to 18% in 2010. By computation, this is a 7 percentage point improvement. However, in this instance, the percentage point change may not represent an improvement, for two reasons. The first is that in 1992 the Chrysler group had 5 lines – Chrysler, Dodge, Jeep, Plymouth, and Eagle – and today only 3 of these lines remain, the other two having disappeared before 2002. The second is the increased number of model offers by foreign manufacturers noted earlier. Consequently, the reliability stature of Chrysler's lower end product offerings may not have changed, or may have changed very little.

For the remaining manufacturers with more sizable sales in the US, there has been little change in this measure's values. General Motors Corporation's share of CR's worst has had a nominal 2 percentage point change from 43% in 1992 to 41% in 2010, Nissan Motor Company's share has risen 3 percentage points from 0% to 3%, Toyota Motor Corporation's share has risen 1 percent point from 0% in 1992 to 1% in 2010, and Honda Motor Company's share has remained unchanged at 0%. General Motors' modest 2 percent point share decline may represent a slight, or greater, worsening in automobile quality at the lower end of its quality spectrum, when account is taken of new foreign model offers, but Toyota's 1 percentage point increase almost certainly represents a decline in automobile quality among some of its many new and redesigned models of the past decade, as does Nissan's 3 percentage point increase.

In summary, by change in manufacturer shares of Consumer Reports' used cars to avoid from 1992 to 2010, Ford has increased the quality of its products at the lower end of its quality spectrum, the Chrysler group may have increased the quality of its lower end some products, Volkswagen's quality likely has declined some, and the quality of Toyota's products probably has reduced a bit or more.

Source by James Bleeker