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J.D. Power and Associates Reports:
The Automotive Industry Records Substantial Long-Term Vehicle Quality Improvements

Lexus Ranks Highest in Vehicle Dependability for the 11th Consecutive Year;
General Motors and Ford Motor Company Earn Record Number of Model Awards

WESTLAKE VILLAGE, Calif.: 29 June 2005 — The automotive industry records an impressive 12 percent improvement in long-term vehicle quality, according to the J.D. Power and Associates 2005 Vehicle Dependability Study^SM (VDS) released today.

The study, which measures problems experienced by original owners of 3-year-old (2002 model-year) vehicles, provides useful information to both consumers and the automotive industry on long-term vehicle quality. For consumers, the VDS offers insight into the reliability and dependability of brands and specific models as they approach the end of a typical warranty period. Manufacturers use this information to track the quality performance of their models over time to implement product improvement plans.

At the industry level, manufacturers have made a considerable leap in quality, with improvements across all categories. The industry average improves 32 problems per 100 vehicles (PP100) compared to 2004. In addition, nearly all nameplates and 84 percent of vehicle models included in the 2005 VDS also record year-over-year improvements. The categories showing the most significant improvements in 2005 include ride, handling and braking; engine; and interior.

“While the Initial Quality Study [IQS], which measures problems experienced in the first 90 days of ownership, can be an indicator of how models will perform over time, our studies consistently show that long-term durability is a tremendously important factor to consumers,” said Chance Parker, executive director of product and research analysis at J.D. Power and Associates.  “As the number of problems owners experience with their vehicles increases, repurchase intent and the number of recommendations owners will make to others decreases. The study also finds that long-term durability can have a significant impact on a vehicle’s retained value.”

According to actual retail transaction data from the Power Information Network, a division of J.D. Power and Associates, 3-year-old vehicles of brands that perform above the industry average in VDS typically retain $1,000 more of their value than those of brands performing below the industry average.

Lexus, which ranks highest in vehicle dependability for the 11th consecutive year, improves 14 percent (23 PP100) compared to 2004.

Porsche makes the largest percentage improvement in its VDS score, while Hyundai experiences the largest reduction in problems reported by owners. Porsche, which ranks second among nameplates, improves 38 percent compared to 2004—a 91 PP100 improvement. Although still hovering below the industry average, Hyundai records a dramatic 115 PP100 improvement (31%).

“Hyundai experienced similar levels of improvement in the 2002 IQS, when these vehicles were new, which shows a successful effort by Hyundai in translating short-term quality improvements into higher long-term quality,” said Parker. “Even though there is still room for improvement, Hyundai is a great example of an automaker that is making strides toward improving vehicle quality by paying close attention to owner feedback and designing products with both short- and long-term quality in mind.”

General Motors models earn eight segment awards and Ford Motor Company models receive five segments awards —a record for both GM and Ford in VDS. Toyota Motor Corporation models receive four awards.

The Lexus LS 430, which earns a score of 90 PP100, is the first model in VDS history to receive fewer than 100 PP100. The LS 430 receives the premium luxury car segment award, and Lexus also receives awards for its RX 300 (entry luxury SUV) and LX 470 (premium luxury SUV) models.

Chevrolet captures the most segment awards, with the Prizm (compact car), Malibu (entry midsize car), S-10 Pickup (midsize pickup) and Silverado HD (heavy-duty full-size pickup) each earning an award in their respective segments. Ford receives three segment awards, for the Thunderbird (entry luxury car), Windstar (midsize van) and E-Series (full-size van).

The VDS is one of three J.D. Power and Associates quality metrics, along with IQS and the Automotive Performance, Execution and Layout (APEAL) Study, which measures customer perceptions on the design, content, layout and performance of their new vehicles. The results of the 2005 IQS were released in May and the 2005 APEAL Study is scheduled for release in late September.

The 2005 Vehicle Dependability Study is based on responses from 50,635 original owners of 2002 model-year cars and light trucks. For more information on vehicle ratings, visit the J.D. Power Consumer Center at www.jdpower.com.

About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, BusinessWeek and McGraw-Hill Education.  The Corporation has more than 280 offices in 37 countries.  Sales in 2004 were $5.3 billion. Additional information is available at http://www.mcgraw-hill.com.

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com

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