PeachParts Mercedes-Benz Forum - Uh oh! WSJ article hits MB hard

Has anyone seen this disturbing Wall Street Journal article yet? I have reprinted it below.

Zach
1992 300CE

FRANKFURT, Germany, Feb. 4 — Mercedes-Benz, famed for its engineering prowess, is suddenly
facing tough questions about the quality of its
cars, with several surveys showing that the
stately German brand may now trail some
decidedly down-market competition.

A SURPRISE BLOW to Mercedes’s quality
reputation came last week when a normally secretive study of car quality in Europe was leaked to a German trade publication. The report, conducted for the auto makers themselves, showed Mercedes quality and customer satisfaction falling since 1999 to levels below Opel, the German unit of General Motors Corp. and a brand with one of the worst images in Europe. A separate German survey ranked the German-built Ford Focus compact car No. 1 in a study of durability during the first three years of a car’s life. The survey, conducted by TÜV, a German auto-inspection and research association, put half a dozen Toyota models ahead of the first Mercedes model — the
SLK, which came in 12th.

Mercedes’s quality rankings in the U.S. have also
slipped, according to J.D. Power & Associates, an
influential arbiter of automotive-quality ratings. In a fall study
of vehicle dependability, the brand fell to 10th place in 2001
from sixth place the year earlier. It now ranks behind such
brands as Lincoln, Cadillac and Jaguar.
“My personal opinion is that a brand such as Mercedes
should be at the top. That’s what people’s expectations of
the brand are,” said Tom Libby, director of industry analysis
for J.D. Power, who lowered Power’s rating for
Mercedes’s overall product quality to “fair” from “good”
last week in a presentation ahead of the National
Automobile Dealers Association convention in New
Orleans.

The J.D. Power
study, which surveyed
some 156,000 car
owners, found that
five-year-old
Mercedes vehicles
had 296 problems per
100 vehicles, compared with an average of 285 for autos of
the same age by other luxury makers and an overall industry
average of 382. Drivers were questioned about 137
potential problem areas in nine overall categories: interior,
exterior, transmission, engine, features/controls,
ride/handling/braking, seats, sound system and
heating/ventilation/cooling. Mercedes showed the biggest
declines in transmission and features/controls.

The surveys are a blow for Mercedes and its parent,
DaimlerChrysler AG. With its Chrysler Group unit in deep
financial trouble, DaimlerChrysler has relied on Mercedes
as a cash cow. At the same time, Chrysler is counting on
Mercedes to help lift its own quality by supplying key
components like engines.
Donna Boland, Mercedes’s U.S. spokeswoman, said
the company has been dealing with volume increases and
more complex technology. Since 1997, it has gone from
four model lines to nine. Still, she said, the company is
committed to improving its quality rankings.
“Being Mercedes, quality is absolutely the highest
priority,” Boland said. “It’s what our brand is based on. We
will use every resource at our disposal to bring those
numbers up.”

Al Bedwell, research manager at J.D. Power-LMC in
Oxford, England, said Mercedes’s quality issues are a
byproduct of a decision in the early 1990s to focus more on
what consumers want, rather than engineers, and to round
out the company’s product lineup with smaller — and
cheaper — cars such as the A-Class. The moves served
their purpose: World-wide sales of Mercedes cars have
doubled to more than one million a year since 1993, and the
company has turned in repeated record profits. But it’s also
hurt the brand’s overall quality ratings, which take into
account all of its models together.

The A-class, known as “baby Benz,” for example, had
to be temporarily pulled from the market in 1998 when it
flipped over during crash avoidance tests. Mercedes’s
sport-utility vehicle, the M-Class, was also criticized for its
interior (later revamped) and, in a Consumer Reports
used-car guide, for its reliability.

“It’s becoming more evident that Mercedes-build
quality isn’t as bulletproof as it used to be,” Bedwell said.
“At the same time, the average-build quality across the
industry is increasing, closing the gap they once enjoyed.”
The most recent slap at Mercedes quality came last
week, when a portion of the normally highly confidential
New Car Buyer Survey was leaked to a German auto trade
publication. Such surveys of European consumers aren’t
typically made public because of tight privacy laws; the
results are usually intended for market research or
manufacturers themselves. The NCBS, for instance, is
conducted for auto manufacturers by survey agencies in
each geographical market. It is arguably the most thorough
ranking on the Continent, measuring quality as well as
general customer satisfaction.

According to the
NCBS survey index, the
number of negative
points per 1,000
Mercedes cars climbed
from around 100 in 1999 to more than 110 last year. At the
same time, the number of negative points on Opel cars
shrank from around 130 in 1999 to near 100 in 2001.
Mercedes and Opel verified the leaked portions of the
report, but didn’t comment on specific faults. Johannes
Reifenrath, director of communications at Mercedes-Benz
passenger cars in Stuttgart, said a more detailed version of
the survey showed Mercedes quality was at least as high as
Opel, but he declined to provide any additional data.

Reifenrath said Mercedes has been working hard to
address the quality issues. “There are a lot of indications
from our plants that some of those models that have been
criticized are improving,” he said.

Despite the surveys, Mercedes’s reputation remains
solid. With U.S. consumers, it trails only Rolls Royce in
quality perceptions among auto makers, ahead of Bentley,
Porsche, Lexus and Bayerische Motoren Werke AG,
according to the EquiTrend study by Harris Interactive.
Lexus, meanwhile, ranked at the top of the J.D. Power
quality studies, well ahead of its competitors. A
Europe-wide survey conducted by German magazine Auto
Motor und Sport, a bible in the industry here, showed
Mercedes had the third most favorable brand image,
following BMW in first place and Porsche.