27 October 2010

Ford, GM Healthy, Chrysler Not

Ford made a $1.7 billion profit in the third quarter, is on track to convert much of its debt to equity, is increasing its market share, and is surging to a high water mark in its product quality ratings.

GM is making progress too, increasing its quality rankings, shedding money losing brands, and getting its post-bankruptcy debts under control.

But, Chrysler saw its namesake brand drop to dead last in product quality ratings of 27 brands, and has not rebounded from bankruptcy nearly as fast. Its other brands are also suffering from shabby quality. Its partnership with Fiat should bring the Fiat 500 minicar to market for the 2011 product year, but Chrysler has no electric car contender in 2011 (a plug in electric Fiat 500 is planned for the 2012 model year) and is weak in the gas-electric hybrid category as well. It has not made major shakeups to its anemic product line yet. Chrysler's bailout is becoming one of the biggest taxpayer costs of the financial crisis bailouts, because its debts are unlikely to be recovered in full from repayment of debt and stock sales.

Chrysler just edged out Honda in September sales, but remained well behind GM, Ford and Toyota. Chrysler hasn't yet posted a post-bankruptcy profit.

Toyota's Scion had the fewest problems of any brand in the survey. It was followed by Porsche, Acura, Honda and Nissan's Infiniti luxury brand. The Toyota brand ranked sixth, down from third last year. It was followed by Subaru and Volvo. Lexus, which had been a top finisher in past years, fell to ninth. Ford was 10th but rose from 16th the previous year.

Consumer Reports rankings, released Tuesday, are widely used by buyers shopping for cars and trucks. . . . The survey of about 960,000 of the magazine's subscribers also restored recommended ratings for eight recalled Toyota brand models.

The Chrysler brand was ranked last of 27 brands shown in the survey, the magazine said, while Jeep ranked 20th and Dodge was 24th. No Chrysler vehicles scored above average in reliability.

As Consumer Reports explains:

Chrysler Corporation hasn't shared in the success of the other Detroit manufacturers. The Chrysler, Dodge, and Jeep brands are saddled with dated models. Twelve of the 20 models that CR had sufficient data for rate below average in reliability. None of Chrysler Corporation's models score above average. With Fiat's acquisition of Chrysler, many of its products will either be replaced or redesigned in the near future.

Those rating will dog Chrysler sales in the year to come.

No comments: