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Auto Quality Improves at Slower Pace DETROIT - Automotive quality has reached a high plateau, but has shown only slight improvement for the past few years. The latest J.D. Power Initial Quality Study shows the industry average reached an all-time high of 107 problems per 100 vehicles. That’s impressive, but it is also the smallest ever increase in the 25-year history of the study. “Even though quality is getting better, it is getting better more slowly,” said David Sargent, vice president of global vehicle research at J.D. Power and Associates. This is in part due to many of the largest improvements already being made. The lowest rated brands today would have been above the industry average when the study started. At the same time, consumers’ demands are higher than ever and meeting those demands can hurt a brand. Ford Motor Co. paid a price for being a leader in technol-
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ogy. The brand fell to 28th from fifth, mainly due to the expansion of the MyFord Touch connectivity system to more vehicles. “Ford is very aware of this and they’re working night and day to fix it,” Sargent said. “But right now they’re suffering from being on the cutting edge.” Sargent said Ford could expect a long-term payoff despite this short-term pain. And the brand still led in two categories with two of its highest volume vehicles – the Taurus and the F-150. Toyota, meanwhile, recovered some of its reputation, rising to eighth from 21st last year. The brand’s luxury sister, Lexus, topped the overall rankings. No single Toyota vehicle led any category, although Sargent said many finished second or third. Toyota still suffers from an image problem with nonToyota drivers, Sargent said, but its owners remain very loyal to the brand. Honda proved the biggest winner this year, finishing second among all brands and leading in seven individual segments. Land Rover was the most improved brand, although it remains well below the industry average. Dodge, the lowest ranked brand with 137 problems per 100 vehicles, led the midsize sporty car category with its Challenger. “The difference between the best and the least good are relatively small,” Sargent said.
SPEED BUMP: Ford employees tout the company’s MyFord Touch technologyat this year’s Chicago Auto Show. But J.D. Power said consumers found it less intuitive than they want it to be.
CarMax Builds on Success
CarMax Inc. reported another quarter of record results and plans to add a dozen more stores in the next year. Net sales and operating revenues increased to $2.68 billion from $2.26 billion in the same quarter of last year. Net earnings increased to $126.3 million, compared with $101.1 million in the same period a year ago. Total used unit sales rose 8 percent and comparable store used unit sales increased 6 percent. CEO Tom Folliard said increased store traffic drove the growth. Folliard said conversions decreased slightly in the quarter, so CarMax saw more shoppers than buyers. Those buyers are paying more. The average retail at CarMax’s stores is $19,000, up from $16,000 in the fall of 2008. CarMax executives expect even more success ahead. “The single thing we’re most excited about is our prospects for growth going forward,” Folliard said. Continued on page 5
IN THIS ISSUE • The NIADA honored an automotive educator. – Page 3
• Another Texas dealer wins national award. – Page 8
• The feds say used-car buyers should get recall notices. – Page 6
• Edmunds.com names the best used vehicles. – Page 16
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