Findings in Perceived Quality Study USA Spring 2012

Perception is a key factor for purchase process. Consumers make their decisions after the right analysis of several variables but at the end their perception about a specific product or service counts a lot on the decision. In car industry perception has become an important indicator for car sales. Besides, perception of others (relatives or friends) through opinions given to the potential buyer have a direct impact on the purchase decision. Recently ALG, an American source for automotive residual values and analytical data products, made its study about Perceived Quality Spring 2012 in the USA market. Interesting numbers for Fiat-Chrysler brands.

PQS range is 0-100. Average is 59,1. Source: ALG

First of all none of Group’s brands had an important improvement in quality perception compared to 2008 figures. Just Hyundai-Kia and Ford showed improvements as part of their great marketing campaign of good cars with high quality. It is important to mention that changing people’s perception of quality is a long term task that has to accomplished consistently. The ranking is Quality Perception is mainly composed by Japanese brands: Honda, Toyota, Subaru, Ford, Nissan, VW, Mazda and Hyundai above the industry average. In the other hand there are Smart, Fiat, Suzuki, Dodge, Chrysler, Kia and Jeep with PQS range numbers below the average. It means that the Quality Perception of these brands is less than what the Quality perception average of the survey, or in other words, the perception Americans have about their quality must be improved a lot. Another cool fact was that surprinsingly among luxury brands study, Alfa Romeo was measured. It is interesting to know what Americans think of the quality of a brand that stopped selling cars 17 years ago. Of course the result is not the best, as Alfa occupies last place very close to Jaguar and Land Rover. Nevertheless when looking at the comparison with last years results, the progress of Fiat-Chrysler brands is relevant. Fiat improved 6.1 points in one year, being the second largest improve after Toyota. Then comes Dodge with an improvement of 2.5 points (4th place), and Chrysler that gained 1.2 points (6th place), all of them above the average growth. RAM is below the average but had an increase on quality perception of 0.6 points. The only brand that had a decline was Jeep with a Quality Perception index that falled 0.7 points during the last year. In other words, all F-C brands remain among the lowest rated in the report, they are showing upward momentum.

This graphic shows the evolution of Quality perception per brand from last survey in Spring 2011. The average is +0,9. Source: ALG

But along with the quality perception index, it is also important to see how familiarity with the brand affects it. Generally those brands with high awareness are also more likely to be well evaluated in quality fields. And is the brand is known for its quality (whether good or bad) its awareness is going to be high also. And in fact the survey shows a positive correlation between quality and awareness. Most of F-C brands fail again: they are identify as brands with high recognition (awareness) but low quality: Chrysler, Dodge and Jeep. Fiat brand is in the worse scenario but with very good potential. It is a brand with poor quality perception and relatively low awareness. But it is important to mention that is a brand re entering American market after almost 30 years of its last presence in the States, when they stopped sales because of very bad quality perception and low sales. Nowadays, after 15 months selling its small 500, it is catching a new generation of drivers with a different approach. And it has worked: according to the survey, Fiat has more awareness than Smart and Mini, and the same of Suzuki. Alfa Romeo is more or less in the same situation. Certainly recent improvements in quality standards of F-C models should have a future impact on the surveys, but it is also clear there is a long way to go and they have to keep working on this important issue.