J.D. Power and Associates Reports: Overall Initial Quality Improves Considerably, with Gains Shared Across Most Manufacturers

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Cecil Robinson
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1 Reports: Overall Initial Quality Improves Considerably, with Gains Shared Across Most Manufacturers American Honda, Ford Motor Company, General Motors Corporation and Toyota Motor Sales Each Capture Three Initial Quality Model Awards WESTLAKE VILLAGE, Calif.: 4 June 2008 Initial quality in the automotive industry has improved significantly in 2008, with substantial gains demonstrated by nearly three-fourths of the 36 ranked nameplates, according to the J.D. Power and Associates released today. Overall quality improves to 118 problems per 100 vehicles (PP100) in 2008, down from 125 PP100 in Due to some strong new-vehicle launches, in addition to a continued reduction in the level of defects and malfunctions, overall quality improves by 6 percent in 2008, compared with 2007, said David Sargent, vice president of automotive research at J.D. Power and Associates. This gain is driven not only by strong advances from many of the high-volume brands such as Chevrolet, Ford and Toyota, but also by very significant improvements by many other automakers. This industry-wide improvement is a testament to the effort that automakers are putting into listening to the voice of the customer, and the hard work they have undertaken to integrate that feedback to design, engineer and manufacture better-quality vehicles. From working closely with the industry, we see the importance that is placed on initial quality. Vehicle manufacturers and consumers alike are reaping the rewards of this effort. The Initial Quality Study serves as the industry benchmark for new-vehicle quality measured at 90 days of ownership. The study is used extensively by vehicle manufacturers worldwide to help them design and build better vehicles and by consumers to help them in their vehicle purchase decisions. Initial quality has been shown over the years to be an excellent predictor of long-term durability, which can significantly impact consumer purchase decisions. The study captures problems experienced by owners in two distinct categories quality of design and defects and malfunctions. The study finds that 86 percent of the overall improvement is due to advances in eliminating defects and malfunctions. Minimizing design problems remains a major challenge for the industry, particularly since new technology, such as navigation and entertainment devices, is becoming increasingly common in today s new vehicles. As consumer demand for new and more advanced wireless communication, navigation and audio technology continues to grow, manufacturers face challenges related to how well these systems are integrated into their vehicles, said Sargent. In particular, issues with difficult-to-use audio and entertainment controls and voice command recognition failure are among the top ten problems most frequently reported by customers. Since hands-free communication for drivers will become a mandate in more and more areas throughout the U.S., this will need to be an area of continued focus for automakers. The study also finds that new-vehicle sales patterns in 2008 have shifted away from the largest models and toward smaller models. (Page 1 of 3)

2 This shift in sales preferences among new-vehicle buyers is in part a response to rapidly increasing fuel prices, said Sargent. The good news for consumers in this difficult environment is that they can downsize with confidence, as there are many models with high initial quality in the smaller-vehicle segments. J.D. Power and Associates forecasts that 28 new compact-vehicle models will launch by 2010, and it will be particularly important for manufacturers to ensure high initial quality in these launches IQS Ranking Highlights Honda models capture three segment awards more than any other nameplate in the 2008 study for the Civic, CR-V and Fit. Garnering two segment awards each are: Chevrolet (Malibu and Silverado LD); Dodge (Dakota and Durango); Infiniti (EX-Series and M-Series); Lexus (LS and RX); and Mercedes-Benz (CLK- Class and E-Class). The Porsche 911 has the fewest quality problems in the industry, with just 67 problems per 100 vehicles. Also receiving segment awards are the Ford E-Series, Lincoln Navigator, Mazda MX-5 Miata, Pontiac Grand Prix Sedan and Toyota Sequoia. In past years, automakers have frequently struggled to achieve very high initial quality with new models, said Sargent. With product launches and redesigns often being problematic for manufacturers from a quality standpoint, it is particularly impressive that the Chevrolet Malibu and Infiniti EX-Series achieve such high levels of quality that they receive awards in their launch year. For a third consecutive year, Porsche tops the overall nameplate rankings, averaging 87 PP100. Following in the rankings are Infiniti (which improves from 9 th rank position in 2007), Lexus, Mercedes-Benz and Toyota, respectively. Audi posts the largest improvement in ranking, moving from 26 th place in 2007 to 10 th in Porsche continues its steady improvement and has succeeded in distancing itself from the second-ranked nameplate to a greater degree in 2008 by a gap of 11 PP100 compared with 3 PP100 in 2007, said Sargent. Assembly Plant Awards The Mercedes-Benz assembly plant in Sindelfingen, Germany, receives the Platinum Plant Quality Award for producing vehicles yielding the fewest defects and malfunctions. Averaging just 33 PP100, the plant produces the Mercedes-Benz CL-Class, CLS-Class, E-Class Sedan, E-Class Wagon and S-Class. Plant awards are based solely on defect and malfunction counts. Among North and South American plants, the Toyota plant in Baja California, Mexico, which produces the Toyota Tacoma, achieves the Gold Plant Quality Award. In the Asia Pacific region, Toyota s Fujimatsu, Japan, plant, which produces the Toyota Prius, receives the Gold Plant Quality Award. The 2008 Initial Quality Study is based on responses from more than 81,500 purchasers and lessees of new 2008 model-year cars and trucks surveyed after 90 days of ownership. The study is based on a 228-question battery designed to provide manufacturers with information to facilitate problem determination and drive product improvement. The study was fielded between February and April Find more detailed findings on new-vehicle quality performance as well as model photos and specs by watching a video, reading an article and reviewing quality ratings at JDPower.com. About J.D. Power and Associates Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The company s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car (Page 2 of 3)

3 insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies. About The McGraw-Hill Companies Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2007 were $6.8 billion. Additional information is available at J.D. Power and Associates Media Relations Contacts: John Tews Syvetril Perryman Director, Media Relations Media Relations Specialist Troy, Mich. Westlake Village, Calif. (248) (805) john.tews@jdpa.com syvetril.perryman@jdpa.com No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. # # # (Page 3 of 3) NOTE: Four charts follow.

4 2008 Nameplate IQS Ranking Problems Per 100 Vehicles Porsche Infiniti Lexus Mercedes-Benz Toyota Mercury Honda Ford Jaguar Audi Cadillac Chevrolet Hyundai Pontiac Lincoln Buick Industry Average Acura Kia Nissan Volvo BMW GMC Mazda Volkswagen HUMMER Subaru Scion Dodge Chrysler Mitsubishi Saab Suzuki Saturn Land Rover MINI Jeep Isuzu and smart are included in the study, but not ranked due to small sample size. Charts and graphs extracted from this press release must be accompanied by a statement identifying J.D. Power and Associates as the publisher and the J.D. Power and Associates 2008 Initial Quality Study SM as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power and Associates survey results without the express prior written consent of J.D. Power and Associates.

5 Top Three Models per Segment Car Segments Sub-Compact Car Honda Fit Kia Rio Hyundai Accent Compact Car Honda Civic Toyota Prius Hyundai Elantra Sedan Compact Sporty Car Mazda MX-5 Miata Subaru Impreza Pontiac Solstice Compact Premium Sporty Car Mercedes-Benz CLK-Class Porsche Cayman Volvo C70 Entry Premium Vehicle Midsize Premium Car Infiniti M-Series (tie) Mercedes-Benz E-Class (tie) Audi A6 (tie) Lexus ES 350 (tie) Large Premium Car Lexus LS Mercedes-Benz S-Class Cadillac DTS Midsize Car Chevrolet Malibu Mitsubishi Galant Ford Fusion Large Car Pontiac Grand Prix Sedan Mercury Sable Mercury Grand Marquis Infiniti EX-Series Infiniti G-Series Acura TSX (tie) Volvo S40 (tie) For more detailed findings on new-vehicle quality performance, visit NOTE: There must be at least four models with sufficient sample in any given award segment for an award to be issued. In 2008, there are only two premium sporty models and three midsize sporty models with sufficient sample, thus no premium sporty and midsize sporty awards are issued. Charts and graphs extracted from this press release must be accompanied by a statement identifying J.D. Power and Associates as the publisher and the J.D. Power and Associates 2008 Initial Quality Study SM as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power and Associates study results without the express prior written consent of J.D. Power and Associates.

6 Top Three Models per Segment Truck/Multi-Activity Vehicle (MAV) Segments Compact MAV Honda CR-V Chrysler PT Cruiser Ford Escape Midsize MAV Dodge Durango Hyundai Santa Fe Toyota Highlander Large MAV Toyota Sequoia Chevrolet Tahoe GMC Yukon Midsize Premium MAV Lexus RX Lexus GX 470 Porsche Cayenne Large Premium MAV Lincoln Navigator Infiniti QX56 Cadillac Escalade Large Pickup Chevrolet Silverado LD Toyota Tundra Chevrolet Avalanche Midsize Pickup Dodge Dakota Ford Ranger Toyota Tacoma Van Ford E-Series Nissan Quest Chevrolet Express For more detailed findings on new-vehicle quality performance, visit Charts and graphs extracted from this press release must be accompanied by a statement identifying J.D. Power and Associates as the publisher and the J.D. Power and Associates 2008 Initial Quality Study SM as the source. Rankings are based on numerical scores and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power and Associates study results without the express prior written consent of J.D. Power and Associates.

7 2008 Assembly Plant Quality Award Recipients Based on Vehicles Produced for U.S. Market Platinum Award Mercedes-Benz Sindelfingen, Germany PP100 (defects/malfunctions only) 33 Model(s) Produced at Plant CL-Class, CLS-Class, E-Class Sedan and Wagon and S-Class North/South America Asia Pacific Toyota Baja California, Mexico Gold Toyota San Antonio, Texas Silver General Motors Corporation Fairfax II, Kansas Bronze Toyota Tacoma Toyota Tundra Chevrolet Malibu and Saturn AURA Nissan Motor Company Tochigi, Japan Silver Europe Toyota Fujimatsu, Japan Gold Toyota Motor Corporation Tahara, Japan Bronze Porsche Stuttgart, Germany Silver BMW Regensburg, Germany Bronze Toyota Prius Infiniti EX Series, G35 Sedan, G37 Coupe, M35, M45; Nissan 350Z Coupe and Roadster Lexus GS 350/GS 460/GS 450h, GX 470, IS 250/IS 350/IS-F, LS 460/LS 600h; Toyota 4Runner, Land Cruiser, and RAV4 Porsche 911 Cabriolet and Coupe BMW 3 Series Convertible, Coupe and Sedan Charts and graphs extracted from this press release must be accompanied by a statement identifying J.D. Power and Associates as the publisher and the J.D. Power and Associates 2008 Initial Quality Study SM as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power and Associates study results without the express prior written consent of J.D. Power and Associates.

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