Rare good news for GM as Buick tops Lexus in quality

One of the great benefits of raw capitalism is that consumers get to vote on product quality every day. This means that companies compete with each other to build and service products that win with customers. In the automobile industry, the gold standard for measuring who's up and who's down is the JD Power Vehicle Dependability Survey. And this year, for the first time, Tata Motors' (TTM) Jaguar and General Motors (GM) Buick knocked Toyota Motor Corp.'s (TM) Lexus out of the top spot.

For me, the most amazing thing about this report is that Jaguar has finally climbed out of the cellar of quality problems for which is was known for decades. Under Ford Motor (F), Jaguar stayed far from the top but India's Tata bought Jaguar in 2007 and its quality improvements have been dramatic. Jaguar's overall rise was due to "fewer reported problems with vehicle exterior, sound system and the overall driving experience," according to AP. But Jaguar is small fry in the US, selling 14,000 vehicles here in 2008, while Buick sold 128,000.

And I have to hand it to GM for producing such a high quality vehicle. Its executives should let America know about this result because it needs to gain all the market share it can. Meanwhile, Lexus ought to view its second place JD Power rank as a significant kick in the posterior. After taking a look at the Lexus LS 460, I got a sinking feeling that this $72,000+ sedan was grossly overpriced and styled to switch off my buying bone. The JD Power survey doesn't address these design issues, but the quality results ought to push Lexus to reinvent itself.

And that's the ultimate long-term benefit of the competition for customer satisfaction -- creative destruction.

Peter Cohan is president ofPeter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.

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