Foreign companies make it difficult for Detroit car makers to get back to the top.

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Do you agree with these picks?

This year, the higher end of Consumer Reports’ car rankings has been taken over by Asian and European car companies. Toyota, Honda, Hyundai, Subaru, Audi, and BMW took these 11 top spots, not allowing any of the American car companies to win this year. These foreign companies are now not only taking over the market but also raising the bar.

Check this website to see Consumer Reports’ ranking of 2013.

According to this report, Cadillac was the top picked car from Detroit automakers. Since there are so many models these days, customers would not be interested in the model unless the car is really good. Consumer Reports also scored the brands by the results based on road tests and reliability this year. As you can see below, Lexus is the one that has the highest reliability score with the highest test score, followed by Subaru, Mazda, Toyota, etc.

This chart looks very interesting and possibly a bit biased. It is hard to believe that they did not choose a single Detroit manufacturers as one of the good ones. Before we just believe in this data, we have to consider the fact that American companies still hold substantial amount of market share. However, their market shares in U.S. market have been declining compared to those in the past. I am a little bit concerned that this chart is not accurate but it certainly shows that the American manufacturers have to work diligently if they do not want to repeat their mistake with the fall of Detroit 3.

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2 comments to Foreign companies make it difficult for Detroit car makers to get back to the top.

  • gradyb13

    I’ve always been a bit dubious about Consumer Reports’ methods. Take someone who buys a Porsche, for example. One would assume that such a person would take very good care of his vehicle, given that he or she has spent an extraordinary amount of money on it. It will therefor receive better reliability scores, but not because it is a more reliable vehicle (Porsche and Lexus trade back and forth for the most reliable vehicles on CR’s surveys). Or, to take a different sort of example, perhaps the kind of person who buys a Honda is more likely to take care of it. I’m not sure why that would be, but assuming that is the case, that would seriously foul up the data.

    You’ll notice that if you read auto forums with car nuts who change the oil on their cars every 500 miles and own a garage full of tires for different seasons, the posters have very, very few problems with their cars, virtually regardless of make. It seems to me that the owner of the car, rather than the make one buys, has the most significant impact on reliability of modern cars.

    That says nothing about the “test score” part of this chart, but it has its own problems. I prefer driving small cars, with turbo charged or large engines. My father prefers large sedans, of the land yacht variety. Who is “right?” Neither of us, of course.

  • Consumer Reports does not publish details of their methodology; our guest speaker Mr. Ruggles, who talks to dealers about warranty performance, claims that “good” cars as (apparently) self-reported to/by CR don’t necessarily show up as good at the dealership. Of course consumers may not be aware of what’s done with warranty work, particularly if the local Porsche dealer picks up and then drops off your car.

    Furthermore, unless people love their car they’re less likely to report unless they have a problem; it’s hard to get someone’s attention at a big metro dealership that sells 300 cars a month. Well, how many people are passionate about their GM Malibu? Never mind that not so long ago it was Car of the Year, it just doesn’t get the fans that a Porsche or an Audi gets.

    J.D. Power & Associates (web site) base their business on large random sample surveys that lessen this bias. They also focus on a discrete timeframe. My sense is that automakers are sensitive to CR, because of car shoppers read their reports, but that internally they rely on a combination of JD Power data (to benchmark against the competition) and analysis of warranty and other data (for the details of what’s going wrong).

    That said, there are differences in quality across vehicles. Having been in paint shops at GM, Ford, Toyota and BMW, well, BMW is more finicky. But would that surprise anyone? Similarly, a Lexus is going to get many more checks at the dealership than a Honda – we can ask Mr. Tomm about that on Friday!

    The question is whether these quality differences are significant. If we look at the JDPower data, the answer is no. First, results are reported in rank order; the business media naively repeats that. Yet we know that surveys carry a margin of error – every political journalist duly notes that during our quadriennial US presidential campaigns. If we actually look at the data, most brands are closely grouped (see my blog with a graph here). So for many (but not all) brands quality doesn’t differ statistically (in the technical sense of “statistically significant”).

    How about as a purchaser? Quality really doesn’t vary from that perspective: except for brands such as Land Rover, the average purchaser will experience one problem, not two and not zero. (Land Rover is a small sample, so unless the JDPower oversamples them, their lower ranking may not be significant, either – though they’ve ranked dead last many years in a row, is highly suggestive. But even for them, purchasers would experience two problems.)

    My advice: ignore quality rankings, because when it push comes to shove – well, nowadays no car on the market has to get pushed into the shop. So buy on comfort and features and style and driveability. And within budget.

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