Consumer Reports says Toyota reliability slips
Tue Oct 16, 2007 3:57pm EDT
By Kevin Krolicki and Jui Chakravorty
DETROIT (Reuters) - Consumer Reports said on Tuesday it was reversing a practice of recommending all new Toyota cars and trucks after two models earned below-average rankings in a closely watched reliability study.
The reversal was the latest setback for Toyota Motor Corp. (7203.T: Quote, Profile, Research) after a period of fast growth in the United States that has made it the No. 2 player in the world's largest auto market.
Toyota's U.S. sales slipped 1 percent in September for the third consecutive month of declining results. Meanwhile, high-ranking executives have defected recently to U.S. automakers and environmental groups have criticized Toyota for resisting stringent increases in fleetwide fuel economy.
In recent years, Japanese auto brands, led by Toyota, have dominated Consumer Reports' influential study of the most reliable new vehicles.
Although Toyota ranked third in reliability behind only Honda Motor Co (7267.T: Quote, Profile, Research) and Fuji Heavy Industries Ltd's (7270.T: Quote, Profile, Research) Subaru, Consumer Reports also found two Toyota models had "below average" predicted reliability.
Those two models were the V-6 version of Toyota's flagship Camry sedan and the four-wheel-drive, V-8 version of its new Tundra pickup truck.
"Consumer Reports will no longer recommend any new or redesigned Toyota-built models without reliability data on a specific design," the publication said in a statement. "Previously, new and redesigned models were recommended because of the automaker's excellent track record."
Besides its influence with car shoppers, the annual study is used by major automakers as a proxy for their performance in improving and maintaining vehicle quality.
"None of our internal data points to customer dissatisfaction with any of those models," Toyota spokesman John McCandless told Reuters.
"We look forward to analyzing the data and we'll sit down with Consumer Reports and take it from there," he said.
The Japanese automaker's fast growth since 2000, when it had less than 10 percent of the U.S. market, has left it facing new pressure and scrutiny.
"Toyota has had a lot of product introductions, they've been pushing up volumes," said David Champion, director of auto testing for Consumer Reports, on the sidelines of an event at which he briefed reporters on the report.
"I'm not sure of the root cause of the problem, but maybe that's having some effect on their quality," he added.
In the first nine months of this year, Toyota had a 16.2 percent share of the U.S. market for new cars and light trucks, behind only General Motors Corp (GM.N: Quote, Profile, Research) at 23.8 percent.
High-ranking executives who have defected from Toyota in recent months include Toyota's former North American chief, Jim Press, who left the automaker after a 37-year career to become vice chairman at Chrysler LLC.
Toyota, which has won credit with consumers for its reputation for quality and fuel-efficiency, has also come under fire from environmental groups for lobbying against stringent U.S. increases in fleetwide fuel economy.
The same study found gains for Ford Motor Co. (F.N: Quote, Profile, Research), which landed three models on the magazine's "most reliable" list.
Consumer Reports ranked the Ford Fusion, Mercury Milan and the automaker's market-leading F-150 pickup truck with a V-6 engine as among the most-reliable new vehicles on the market.
Champion said he has seen a consistent improvement in Ford's products over the last few years. "Obviously, there has been a concerted effort at Ford to see what was going wrong with the product," he said.
Mike Hardie, global manager of quality data at Ford, attributed the improvement to a process that reports customer complaints and problems from the dealerships to the plants.
"If a customer comes in to the dealer with a problem, the plant finds out about it the next day and we figure out how to prevent that from recurring," Hardie said.
"If it's an older model, the problem is sent to the product development department and they analyze it there."
Champion said GM remained inconsistent on its quality. "They seem to put a lot of effort into a certain model one year, and put a lot of effort on another model the next year, so the ratings go up and down on the models," Champion said.
GM had only one brand -- Buick -- rank in the top 20 brands scored by reliability.
Consumer Reports is published by the nonprofit Consumers Union. The magazine accepts no paid advertising.
The publication's "predicted reliability" study for new model vehicles is based on an average of consumer ratings of the same model in the recent years.
The magazine surveys readers and visitors to its Web site about their experience with the cars and trucks they own.