1. Think of a car that you would automatically rank of high quality. What are the features...

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1. Think of a car that you would automatically rank of high quality. What are the features the car possesses or the image it conveys that would suggest it was of high quality?

2. Contrast your rating of a high-quality car with one you would rank “low quality.” What are the reasons you rank one high and the other low quality?

3. What role does car price have in our quality assessment? Can you think of a low or moderately priced car that you would consider high quality? Why?


Americans, it was once said, have a love affair with the automobile. In fact, it isn’t just Americans who are automobile enthusiasts anymore; car ownership around the planet has grown dramatically since the turn of the millennium, as more families find themselves with sufficient income to afford a car. One long-standing question that concerns us as consumers is the quality of the car we are considering to purchase. A host of consumer organizations and industry groups, like Consumers Union (Yonkers, NY) or J.D. Power and Associates (S&P Global Inc., New York City, NY) surveys, serve as a means by which we can seek third-party information on the quality of cars, track trends in cars, and identify potential trouble before spending thousands of dollars on a new purchase.

One of the problems with assessing automobile quality is finding a reasonable definition of what “quality” is intended to mean, especially for rating organizations. For example, J.D. Power and Associates publishes an annual quality assessment guide, the Initial Quality Study (IQS), based on the response to its surveys by new car owners. One interesting feature of these surveys has been the sometimes dramatic upward or downward movement of automobile manufacturers in these surveys, sometimes from one year to the next. For example, from 2014 to 2015, industry data on  Lexus’s quality dropped them six places, from third to ninth overall. Audi dropped from 11th to 16th, whereas Kia rose from seventh to second. Does quality really change that quickly or, to put it another way, have Lexus and Audi cars’ quality demonstrated that level of quality drop-off in just one year?

One potential problem is that most people conflate high quality with a lack of defects. On the other hand, if we adopt Webster’s definition of quality as “the degree of excellence which a thing possesses,” we may start to understand part of the problem with measuring new car quality. J.D. Power’s surveys take this broader approach to quality. The IQS was designed to capture a vehicle’s defects, which could be either a fault in the assembly of the vehicle or a design issue. A fault might include a loose electrical cable or a non-working light switch. A design issue is usually something the car’s owner doesn’t like based on his or her personal preference—for example, an overly complicated radio or hard-to-read display system.

When quality surveys measure both faults and design problems, consumers run the risk of misunderstanding how quality should be measured. Is a leaking sunroof of the same poor quality as a confusing navigation system? It may be the case that, to recall the old adage, one should never buy the first year introduction of a new car until all the bugs have been ironed out. Certainly, evidence suggests that the more new car models a manufacturer introduces in one year, the lower its rating on quality surveys like the IQS administered by J.D. Power. Nevertheless, it is important for people who are considering the purchase of a new car to carefully distinguish what “quality” means to them: Is the absence of defects more important than the concern for design issues? Are design issues more critical? In an age when the search for quality drives consumers’ attitudes and behaviors, for auto companies to be competitive, it never hurts to recognize what “quality” means to prospective buyers.

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Operations Management Managing Global Supply Chains

ISBN: 978-1506302935

1st edition

Authors: Ray R. Venkataraman, Jeffrey K. Pinto

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