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Wednesday, August 09, 2006

Detroit's Sigh Of Relief: Customer Satisfaction

Stocks: (GM)(F)(TM)

JD Power came out with its Initial Quality survey today. The poll looks at the number of defects per vehicle in the 90 days after purchase.

With all of Detoit's problems, the last thing that Ford and GM needed was a poor showing. Things when well for the Big Two.

Lexus kept its spot at the top, which is seems the Toyota luxury brand has had for a century (actually 12 years). But right behind it were Mercury, Buick, and Cadillac. It shows that the argument that quality is what holds buyers back in the showrooms of US made cars hold no water any longer.

Thirteen brands rated above the average for reported problems. Six came from U.S. car companies and five from Japanese companies. Chevy's new Monte Carlo made the list. So did the Buick Century and the Mercury Grand Marguis. In the large SUV category, the GMC Yukon took top honors. In a blow for Ford, the Toyota Tundra edged out the F-150 pick-up, Ford's top selling vehicle. The Ford Ranger placed first for mid-sized pick-ups. Rounding out the list of US winners was the Cadillac Escalade EXT luxury pick-up.

As the U.S. car companies cut costs and vehicle quality moves up, the excuses for falling market share begin to fall away.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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