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Auto News, Analysis and Editorial
2005
Reliability Updates: Big Three Appear Hopelessly Stuck in Quality Quagmire;
Selling Dirt Cheap May Be Best Route to Survival
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2005 Reliability Updates: Big Three Appear Hopelessly Stuck in Quality Quagmire; Selling Dirt Cheap May Be Best Route to Survival
By James B. Bleeker
The 2005 Reliability Updates hardly offer the Big Three a lot of hope.
The following chart graphs the annual Reliability Percentrank averages of the Big Three from 1988 to 2002. For perspective, the annual Reliability Percentrank averages for the Reliable Two - Toyota Motor Corporation and Honda Motor Company - are graphed as well.
From the chart it may be seen that for the entire fifteen-year data history, Big Three Reliability Percentrank averages have consistently fallen below .40, and those of the Reliable Two, above .80. Furthermore, in the most recent year of 2002, the Big Three Reliability Percentrank average was .38, matching its value in 1988.
An extrapolation by linear regression of degree one of these Reliability Percentrank averages through 2012 is given in the following chart.
From the chart, it may be seen that for the foreseeable future Big Three Reliability Percentranks should be mired in the bottom end of the spectrum. This suggests that the Big Three's best route to survival is to sell cheap, dirt cheap preferably.
A breakdown of reliability performance by manufacturer suggests that this route is likely common to all three. The following chart provides the Reliability Percentrank average history of each of the Big Three.
This chart suggests a reliability convergence, or near convergence, of the Big Three that rather hovers about the value projected by the above extrapolation. In particular, note Ford's rather cyclical performance, i.e., its inability to sustain continued reliability gains and its retreat toward the value projected above. This suggests that quality problems at the Big Three are deep-rooted, pervading every, or nearly every, aspect of the company - from designing to engineering to manufacturing to marketing and from executive to engineer to manager to assembly line worker. It may also reflect a North American migration of talent and dedication out of heavy industry toward the newer industries of chip design, software development, biotechnology, and internet marketing.
By account of things, selling dirt cheap seems to be General Motors', Chrysler's, and Ford's most viable long-term solution. However, in the short term, they should be able to benefit from the likelihood that little-to-no information trickles into the bottom third of any broad population subset.
Source of Reliability Percentrank averages: Table II-MVRP
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