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Reliability Perceptions are Changing - Not Good for Toyota

Since all cars are better built today, will Toyota's "reliability" franchise be compromized?
(editor's note)


It’s no secret that auto manufacturers are creating better vehicles than ever before – safer, more feature-rich, higher quality, and more reliable.  Data from J. D. Power and Associate's Vehicle Dependability Study, which surveys owners of three-year-old vehicles regarding the number of problems experienced in the prior twelve months, backs the assertion of improved reliability. 


As illustrated below, these five high-volume brands have each dramatically reduced their problem incidence since 2005.  In fact, Ford’s is now nearly on par with long-time industry leaders Honda and Toyota. 

NOTE: article written by J. D. Power and Associate's

But consumer sentiment is often divorced from reality.  The domestic brands continue to carry poor reliability perceptions borne out of decades of actual poor performance.  The 2010 Avoider Study, which examines the reasons consumers fail to consider (i.e. avoid) particular new models, shows that Chrysler, Chevrolet, and Ford are all avoided by greater than 20% of vehicle buyers because of reliability concerns.  The latter two have made inroads (carried at least partly by better actual performance) and decreased their reliability avoidance by three and seven percentage points, respectively, over the past six years.  Meanwhile, Chrysler’s reliability avoidance continues to worsen.

The Toyota and Honda corporations have long enjoyed stellar reputations for reliability. 


For Acura and Honda, those perceptions have remained remarkably steady for the past six years, never rising above 7% avoidance. 


Conversely, the steady drum of recalls and poor PR has negatively impacted Toyota and Lexus, with 15% and 6% of avoiders, respectively, citing reliability concerns.  Interestingly, corporate sibling Scion, which has largely avoided the fallout, actually experienced an improved reliability perception in 2010.

The Toyota saga illustrates how quickly brand reputations – even those which have been painstakingly crafted over years – can turn. 


Mercedes-Benz went through a similarly painful period ten years ago, when the Chrysler takeover and new product launches created numerous vehicle reliability issues.  It has taken the company the remaining part of the decade to recover its once sterling image. 


Toyota Motor Corporation must continue its redoubled efforts to produce great products and earn back its position as a reliability leader.


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Tags: -, Changing, Good, Not, Perceptions, Reliability, Toyota, are, for


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Comment by Tom Gorham on August 18, 2011 at 6:35pm
Bravo Jason! I'm on the frontline like you. You couldn't have said it better.
Comment by Jason Manning on August 18, 2011 at 12:50pm

It's a funny thing. From the frontline of the industry, shoppers go to, pretty much, every brand to compare. I think in the past it was only a couple before the purchase. Competition is fierce. What a sales associate says to a customer is critical. The Greeting is more critical. The Product Knowledge is more critical. Sales Training is critical.  Social Media and Communication will also be major factors on the comfort level of a buyer. New generations are looking at a more level playing field. I believe American companies will dominate the near future. We have to...


Jason Manning

Comment by Tom Gorham on August 15, 2011 at 2:45pm

I learning things I never knew here about the metrics.  I do think though, that what was happening at that time had an effect beyond the metrics. 

For Toyota fans, who are very loyal, it probably was a "tempest in a teapot" as you say Ralph.  But I think for others, it opened their minds to other brands such as Ford and Chevy that were concurrently introducing high quality product.  I think that, in the end, will have long lasting effects in the marketplace.

In short, Toyota was becoming the dominating player and was knocked down a peg and rightly so.  They would not deny that.  It gave breathing room for other brands to step up and be considered.  Just my opinion.

Comment by Ralph Paglia on August 15, 2011 at 12:14pm

Steve - Thank you for the clarification about timing! In this particular case, timing is absolutely critical in understanding any insight to be gained from the metrics... Thinking back to May 2010, we had the President of Toyota bowing before the US Congress on every news channel and apologizing for the quality defects that precipitated the media frenzy that was PEAKING AT THAT TIME!


I know enough to be objective, but I would bet money that the same study conducted today would show us the impact of media coverage moving on to other topics, such as overall economics and the US Budget Deficits.  If anything, this may be a snapshot of what some would call a "Tempest in Teapot" showing what the media impact of news coverage has on avoidance and brand rejection, whether merited or not.


Toyota builds a great line-up of products, as do other car companies... How much of how that lineup is perceived comes from the news media's influence?

Comment by Steven Witten on August 15, 2011 at 8:19am
Steve Witten from J.D. Power here, Dennis is correct in that the numbers Amit refers is "of those who did not consider a brand" this is the percent that mention reliability as a reason.  It should also be noted that the data was collected from people who purchased in May of 2010, when the Toyota recall issue still a major news story.  At this time, 35% of people purchasing a non-Luxury vehicle considered a Toyota (so 65% avoided Toyota).  This 65% avoidance rate for Toyota was up a few percentage points from 2009.  So overall avoidance for Toyota did not jump up dramatically, its just that the reason people gave for why they didn't consider a Toyota shifted to things like reliability and safety (which wasn't mentioned in the article).  Hope this clears things up a little. 
Comment by Dennis Galbraith on August 15, 2011 at 5:24am

Ralph, I don't have access to that data anymore. I wish I did. Clearly, some of those people avoiding because of quality concerns are people who did not previously avoid the brand, while others continue to avoid the brand but now do so for a different primary reason. It would be shocking to me to find a brand that increased in the percentage of avoiders listing reliability concerns without increasing in the level of avoidance altogether. There is no getting away from the negative impacts of a poor reputation for reliability.


As I study what is being written about the Zero Moment Of Truth, I'm beginning to think the Brand Site Avoidance metric we used to collect may be more important than the Avoider metric. Brand Site Avoidance is the percentage of shoppers who bought a vehicle in a segment you serve but did not visit your brand site in the process. If you don't get them to your brand site, you usually don't get a chance at them at the store. There is a great deal of work yet to be done in this area. I am encouraged by what Dataium is doing and will be able to do in the future. Better understanding the complete picture can only be a positive for progressive dealers.

Comment by Ralph Paglia on August 15, 2011 at 4:43am
Dennis - Thank you for chiming in... Has there ever been a correlation between the REASONS why people avoid a brand or model and the total volume of avoiders? What i am looking for is whether or not there is a connection or correlation between an increase in reliability concerns and the total percentage of brand avoiders within a vehicle type segment...

Comment by Thomas A. Kelly on August 15, 2011 at 3:24am
Thank you for the clarification Dennis, makes better sense to me now...I misunderstood the data too.
Comment by Dennis Galbraith on August 15, 2011 at 3:10am

Bruce, the Avoider data is easily misunderstood. Amit's graph does not mean that twice as many people are avoiding Toyotas. It means that of those avoiding the brand, twice as many are doing so because of reliability concerns. The term Avoidance itself is a little tricky. The study is conducted at a vehicle segment level. Avoiders are people who bought a similar vehicle but never considered your vehicle enough to visit one of your stores and look at it. For example, someone buying an F-150 is a Tundra avoider if they never visited a Toyota store to look at a Tundra during their shopping process. The Avoider study goes on to find out why people avoided a particular vehicle. When you roll up all the shoppers avoiding a Toyota vehicle, 15% listed reliability concerns as the reason why. None of what I've said here changes the conclusions posted in this thread; however, the immediate impact on sales is not as great as it would be if twice as many shoppers were avoiding the brand altogether, so it is important to make the distinction.

BTW, Amit had been working with this data for six years and is one of the industry's leading experts in the field. He also pointed out Kia's avoiders listed reliability concerns significantly less in 2010 than they did 2005 (31% compared to 39%). You hunches are very good Bruce!

Comment by Ralph Paglia on August 14, 2011 at 9:04pm
Let's face reality, almost every OEM builds better cars and trucks today than they did 10 years ago... And that holds true for Toyota, Ford and all the other major car companies.  But, when it comes to brand perceptions and people rejecting one make over another due to these perceptions, the importance of effective marketing communications start to take on some serious dollar signs!

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