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Ford's quality gains boost in public's eye

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Ford's quality gains boost in public's eye

In lease guide survey, automaker posts biggest 6-month hike as average residual value rises

Bryce G. Hoffman / The Detroit News

The quality of Ford Motor Co. cars and trucks has improved steadily for several years, but consumer perception has lagged -- a source of frustration for workers and executives, many of whom felt consumers were not giving Ford vehicles the credit they deserved. Now, that is beginning to change.

According to the latest survey by Automotive Lease Guide, Ford posted the biggest gain in perceived quality of any automaker -- increasing 4.7 percentage points over the past six months. During the same period, the lease guide found that the average residual value of Ford's cars increased by $2,400, while the industry as a whole saw a $616 increase. Residual value roughly equates to resale value.

"We're starting to see the perception catch up now with reality," said Jim Farley, global sales and marketing chief for the Dearborn automaker. "That means we can eliminate the discount relative to quality, and we can get back to pricing parity -- which we are starting to see."

The gains are significant because the lease guide's findings are used by banks and other lenders to set monthly lease rates for cars and trucks.

"They're doing extremely well," Matt Traylen, chief economist for the lease guide, said of Ford. He attributed the automaker's gains to the strength of its new products, a "disciplined" approach to incentives and to favorable public opinion stemming from Ford's decision to forgo a taxpayer bailout last year.

"That was very important in consumer minds," Traylen said. "Of course, Ford's new products also ... have been very well-received by the press and the public."

Ford research shows that the average price at auction for used Ford, Mercury and Lincoln vehicles has increased $3,000 over the past 12 months. That means owners of these cars and trucks will get more when they trade them in -- a fact Farley said he intends to tout, along with the results from the lease guide, in advertising and sales promotions.

Ford's quality gains -- both real and perceived -- come as rival Toyota Motor Corp. is seeing its once stellar reputation undermined by high-profile recalls.

According to the lease guide, Toyota's perceived quality plummeted over the last six months, dropping by 16.5 percentage points. The company's residual values are also falling. The lease guide expects a 2010 Ford Fusion to be worth about $1,600 more than a 2010 Toyota Camry at the end of a typical lease.

"We will take advantage of that in our marketing and promotions," said Farley, who was a senior U.S. executive at Toyota before joining Ford in 2007. "Now, we have proof points of our progress that we didn't have in the past."

But in the past, Ford has made major quality gains only to slide back into bad habits. Think: "Quality is Job One."

Farley stressed that Ford's work is far from done, and he is determined not to see such mistakes repeated.

The Automotive Lease Guide survey is conducted twice a year. About 3,000 licensed drivers are asked how they feel about the quality of each brand's vehicles.

In the latest survey, Ford trucks had the highest quality rating of any American product, coming in third after Honda and Nissan, with 70.5 percent of those surveyed saying they had positive view of Ford truck quality.

The results include separate ratings for Ford, Chevrolet and Dodge brand cars and trucks, while all other brands receive one ranking for all models.

Despite Toyota's fall, Ford's cars still ranked behind Toyota's, albeit by less than 1 percentage point. Toyota scored a 67.6 percent positive rating, while Ford cars came in at 66.8 percent.

Overall, Toyota ranked No. 6 in the survey, followed by Ford cars in seventh place. Subaru placed fourth and Volkswagen was at No. 5.

Chrysler Group LLC's Chrysler and Dodge car brands were the lowest rated in the survey, with 44.4 percent and 42.6 percent respectively.

General Motors Co.'s Buick was the best-rated American brand after Ford, with a 57.2 percent positive rating.

From The Detroit News: http://detnews.com/article/20100515/AUTO01/5150312/1148/Ford-s-quality-gains-boost-in-public-s-eye#ixzz0o2qJ7bUA

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