For the first time in 21 years, Mercedes-Benz beat Lexus in the United States in one of the industry's most watched initial quality studies. Now it's aiming for the top overall spot.
In the 2010 J.D. Power and Associates U.S. Initial Quality Survey, Mercedes was third, up from sixth in 2009. Lexus plunged from the top slot in 2009 to fourth this year. Porsche AG was first, followed by Honda Motor Co.'s Acura division.
J.D. Power has been conducting the survey for 24 years, and Mercedes-Benz was quality king before Lexus arrived in the United States in 1989. Mercedes was first in initial quality in 1987, dropped to second place in 1988, regained the crown in 1989 and lost it to Lexus in 1990.
In recent years -- especially since the arrival of Mercedes-Benz USA CEO Ernst Lieb -- Daimler AG's Mercedes brand has been hellbent on regaining its premier status in the luxury-car world.
It has overhauled dealer relations, improved manufacturing and engineering, and finetuned other processes to deliver what Mercedes executives describe as 'the dream" for customers.
"Are we happy? Third is not first," Lieb told employees and dealers in a taped address last week. "We are going to try and work hard to be first next year."
Mercedes is also closing in on Lexus as the top-selling luxury brand in the U.S. market. Through May, Lexus sales' in the U.S. stood at 90,098 units, just ahead of Mercedes with sales of 88,010, according to the Automotive News Data Center. BMW is third with year-to-date sales of 81,450 units.
Daimler and Mercedes executives admit they took their eye off Mercedes quality during the tumultuous Chrysler era. In 2006 Mercedes fell to a low of 25th in the J.D. Power ranking.
Lexus has been the leader in the U.S. quality study 13 times since 1990. And a J.D. Power official says the brand's tumble wasn't because its quality deteriorated significantly, or because of recalls or the woes of Toyota, its parent company.
David Sargent, vice president global vehicle research for J.D. Power, says Lexus fell in the survey results because “others just got better.”
So what did Mercedes do? It had nearly flawless launches of two redesigned vehicles, the C-class and E-class sedans. And Mercedes made the current-generation M-class SUV nearly bulletproof in its final year, before a redesigned model goes on sale.
“What moved the needle is each (of those three models) improved significantly, and together they are two-thirds of Mercedes-Benz [U.S.] sales,” says Sargent. “Mercedes Benz has showed good steady improvement, and one of the challenges is they have do it with so many different models.”
In the 2010 study, five Mercedes models placed among the top three in their respective segments.
At Lexus, where there are significantly fewer models, the decline in the quality study wasn't the result of any major problems. In fact, the changes in individual vehicle scores “were fairly marginal,” says Sargent.
The perception of Lexus wasn't clouded significantly by the Toyota recalls. J.D. Power begins its model-year surveys in November and includes vehicles sold through February of the following year. New-car buyers get their surveys three months after their purchase, which means November 2009 buyers answered the questionnaire in February 2010. Only the last wave of Lexus buyers received the questionnaire in May, when Toyota was being grilled in Congress about its safety problems.