Chinese and Indian vehicle manufacturers are about five years behind the international automotive market when it comes to quality, says marketing information firm JD Power founder Dave Power.
Speaking at a press briefing at the Mercedes-Benz East London plant earlier this month, Power said that the product quality of many Chinese and Indian vehicles had failed to meet the demands of customers in major vehicle markets, making quality the predominant factor preventing a number of these manufacturers from breaking into these markets.
He said that, despite China’s having surpassed Japan as the second-largest country in terms of vehicle sales last year, many Chinese companies trying to make it in the US market had given up temporarily.
He noted that, as a result of this, the trend had been for these companies to initially enter less-developed markets, where an under- standing of what they needed to correct was gained ahead of breaking into major markets.
JD Power vice-president for research in Europe, the Middle East and Africa Brian Walters com- mented that JD Power’s initial quality study for South Africa had revealed that Chinese pick-up trucks entering the South African market had a long way to go before they could compare with locally produced products.
Walters predicted that, as these manufacturers learnt more about their customers’ quality expectations, vehicle quality was likely to improve.
He said that the brands were relatively new on the market and, as such, had to undergo a learning curve to understand what was important to local consumers, as well as the conditions that their vehicles would have to operate under in different markets.
Power commented that the international trend towards consolidation and globalisation in the vehicle-manufacturing market would also likely lead to the quality improvement of Chinese automotive manufacturers.
“We know that the 100 manufacturers [currently in China] are not going to last for the next three or four years. We’ll see a lot of them going out of business as the stronger ones get stronger.”
He drew a comparison between the Chinese and US vehicle markets, noting that the Chinese market was currently where the US was in the 1920s.
Power added that education and technology, which were readily available to the Chinese manufacturers, were the key ingredients that would boost the quality of Chinese automotive manufacturing.
He predicted that the Chinese could surpass the US as the top market in the world for vehicles.
Meanwhile, Power said that he did not expect vehicle quality to decrease with the significant decline in vehicle sales in the US in the last year, a trend which he expected would continue through 2008. “I think that when vehicle sales go down, people get more religious and try harder.”
The company’s independent surveys of vehicle customer satisfaction, product quality and buyer behaviour have demonstrated a marked improvement in vehicle quality over the years.
Power said that surveys in the US market indicated an average of 120 problems per 100 (PP100) vehicles, which was a significant advance on the 700 PP100 to 800 PP100 that the company encountered about 25 years ago.
In its fourth year in South Africa, JD Power ranked the East London Mercedes-Benz vehicle assembly plant as the highest in initial quality among passenger-vehicle manufacturing plants in South Africa.
The company ranks vehicle assembly plants according to the number of defects and malfunctions in the vehicles produced at the plant. The Mercedes-Benz C-Class plant ranked the highest in quality, with 103 PP100.