Ford: Profits Not The Whole Story

While analysts and stock market types are all over the news about Ford not losing as much money as it did last quarter there was actually something buried in the Ford press materials that nobody seems to have noticed: Ford’s quality gains have put it on par with Toyota.

According to the company, Ford’s customer satisfaction with vehicle quality reached its highest level in North American and now equals Toyota. What’s more, Ford, Lincoln and Mercury vehicles had the fewest things go wrong among all auto makers according to a survey by RDA. That’s huge news.

Sure, the fact that Ford isn’t losing its assets is certainly good news. In the present horrible car market the fact that Ford can even sell vehicles is big news, but the fact that those vehicles are making customers happy is exceptional news.

Another huge factor is the fact that Ford has gained market share. It’s possible that, if the company continues to make its customers happy, that they will retain those customers when times are better, too. Those market share gains could actually stick making Ford an even stronger competitor. Presently Ford’s U.S. market share increased by 2.2 percent.

Of course part of this gain came at the hands of the government’s cash for clunkers program. Ford’s Focus and Escape were big winners in this program. Ford has also seen hybrid sales rise by 73 percent compared to an industry average of a 14 percent drop. Only the Toyota Prius is seeing strong sales presently with 2010 model year Prius sales also strong as spurred by the government clunkers program. Before that, sales were down by as much as 45 percent on the iconic hybrid.

Still, the customer satisfaction survey that is most widely publicized is the one by J.D. Power and Associates and, in that survey, Ford was in eighth place in quality, not first. Still, this puts it in a statistical dead heat with Toyota, a good place to be. For many years Toyota has promoted itself as the go-to brand for quality.

The J.D. Power study had Ford scoring an average of 102 things going wrong for every 100 vehicles sold and Toyota scoring 101, a statistically invalid difference. Surprisingly, Hyundai was the top scorer in non-luxury brands with a 95.

Toyota has faced its first unprofitable quarter in decades and is having to look to cuts and changes in its operation, one of the disadvantages of being such a huge vehicle manufacturer. While they are still on top in terms of sales, the total number of sales is down considerably even with the cash for clunkers program.