Reliability As Value Isn't What It Used To Be

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Auto industry observers have predicted for years that as automakers get closer and closer to each other in terms of vehicle quality and durability, attributes like looks, vehicle performance, features and gadgets will play a bigger role in consumers' decisions about brands and vehicles.

San Diego consultancy Strategic Vision's latest study suggests that moment may have arrived. The firm says that for the first time in the 15-year history of its "True Value Index" (TVI), the top Japanese automaker, Toyota, has no vehicles leading any segment.

The study is based on surveys of more than 48,000 consumers who bought 2009 models from September 2008 to March 2009. It gauges their impressions of the car or truck 90 to 120 days after purchase, covering some 150 attributes in areas like perceived quality, purchase reasons, demographics, styling, economics of the vehicle, warranty and standard features.

Alexander Edwards, president of Strategic Vision's automotive division, tells Marketing Daily that while Toyota still leads in perceived quality, the gap is small and the news isn't good. "Toyota clearly owns expected durability and reliability, and this has given them a significant advantage over the 15 years. But now that everyone else is doing very well when it comes to perceived quality, that advantage is minor at best," he says.

"And the customers now are saying they know the Toyota vehicle is excellent here and there, but it's not a product that is giving me features I want at a price I want. And because the emotion in loving your Toyota isn't as strong as some other vehicles, since product delight isn't there, it has slipped to third or fourth place."

The firm says a "revolution in consumer purchase habits" is also turning the tables at the luxury end of the market, where a mass-market brand -- Hyundai, once hobbled by a poor rep -- is competing against the likes of BMW and Infiniti. The firm says the Hyundai Genesis is the near-luxury car segment leader as the car has brought luxury buyers to Hyundai because Genesis buyers have household incomes very close to BMW 3-Series and Mercedes C-Class buyers.

"We see many Lexus, Infiniti, Cadillac and BMW owners trading in their vehicles for the Genesis. Hyundai competes by meeting a customer's security needs with perceived quality and successful programs such as 'Hyundai Assurance,' combining price, warranty and value a customer can love."

Ford Motor Co. came out as the most improved brand and corporation in the TVI study. The Focus Coupe, Mustang Convertible, Flex, Expedition and F-250 lead their respective vehicle segments. Volkswagen of America lead with the CC Sedan, which posted the highest TVI score of any model, Tiguan, Jetta and Audi Q7. American Honda's Odyssey and Ridgeline, and the Insight hybrid, which was the small car segment winner.

"Value isn't a cheap car," says Edwards. "It means the value of the experience you get for every dollar you spend. Toyota, because of its quality, had really provided a foundation for that. But now buyers of other vehicles are more delighted with their vehicle and styling because they believe the quality is just as good."

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