DIANA T. KURYLKO | Automotive News | 5/23/05
Audi has attacked quality problems with evangelical passion, reversing a less-than-stellar reputation in the last three years.
Audi jumped three spots to No. 8 in the J.D. Power and Associates 2005 Initial Quality Study released last week. The latest improvement clears another hurdle for the German brand, which set out to improve its quality in 2002 when it languished below the industry average.
Audi's effort began by accepting the idea that listening to the U.S. customers pays off.
The mind-set at Audi dramatically contrasts with that at Mercedes-Benz. Eckhard Cordes, head of the Mercedes car group, said recently that the brand is rethinking whether it wants to cater to U.S. tastes to the degree required to be No. 1 in the Power study.
Audi now looks at U.S. quality monthly at the board level. It often makes changes to all its vehicles as a result.
"We've learned because of the greater transparency in the U.S. and the higher level of consumerism that we can get more information from this market, apply that worldwide and raise the whole brand up," says March Trahan, product management and quality director.
Audi of America has also set a target of 18 weeks to fix quality problems. More often than not Audi beats that target, says Trahan.
"I have worked with Audi for more than 25 years, and in the past four years there is a new dimension and a new Audi quality culture," says Trahan. "You see Audi people think differently when faced with a decision."
Audi has made changes ranging from better windshield wiper blades to bigger, quieter brake pads, all because of the U.S. consumer.
The results are evident not only in the J.D. Power survey but the annual auto quality study by Consumer Reports magazine. The magazine ranked Audi as the best European brand and cited the A4 V-6 as a "bright spot."
Neal Oddes, senior director of research for J.D. Power in Westlake Village, Calif., says Audi quality has been "consistently improving for the past several years." He adds: "They are making pretty significant strides."
Jerry Nelson, chairman of the Audi dealer council and owner of Schneider + Nelson Audi in West Long Branch, N.J., says he has never seen such high quality in his 28 years as a dealer.
"We have lived through some difficult times with quality in the past," Nelson says. "The vehicles now are the best in the marketplace."
From the bottom up
Four years ago, Audi's initial quality was well below average on the Power study. The brand was stinging from a nasty recall of the 1998-2001 A6. Sulfur deposits on the fuel-level sensing units in the gas tank caused the gauge to read full then the tank wasn't.
So Audi acted. The first step was separating its quality from the joint department at Volkswagen of America that handled both brands.
Audi elevated quality to the board level at corporate in Germany. Trahan attends monthly meetings in Germany, held specifically to discuss North American quality with board members and representatives from technical and development departments.
Audi CEO Martin Winterkorn attends. Winterkorn spearheaded much of Audi's new emphasis on U.S. quality.
In the U.S. market, Trahan hired about 50 quality experts and brought in additional people from Germany. The quality department now has 94 employees.
Thirty engineers or technicians at headquarters in Auburn Hills, Mich., collect data about problems. They talk to consumers, look at J.D. Power and Consumer Reports numbers, talk to dealer product-support personnel and even consider anecdotal information, says Trahan.
By every internal measure Audi has, the process is working, says Trahan.
"Reliability is no longer an issue," he says. "That is what we are starting to hear back from our dealers."
Different from Europe
Audi needed to address what Trahan calls "a different product configuration" in North America compared to Europe.
"There are equipment differences, some unique to this market and environment," says Trahan. "This led to a confluence of factors that led to reliability challenges in the late '90s and early 2000."
Some of the issues identified include changing the rubber and blade on the windshield wipers so that they worked at the lower U.S driving speeds.
"The joke was they do not seem to work," says Trahan. "They are designed to work on the autobahn at high speeds."
Another was addressing complaints about brake noise and improving brake performance for U.S. driving conditions. Because there is more stop-and-go driving in the United States, Audi needed bigger brakes. Audi made its brakes 20 percent larger and gave designers more latitude in the tuning, says Trahan.
Other issues have included the location of cupholders and the cruise-control switch. The A4 and A3 have U.S.- and Canada-specific center consoles with better positioning of both.
A key benefit to higher quality is lower warranty costs. Trahan won't say how much Audi has saved, but says the number of occurrences -- anything that makes the customer come back to the dealer -- fell 15 percent from 2002 to 2003, another 20 percent from 2003 to 2004 and about 20 percent in the first few months of 2005.
"When you start to pull all of this together, you can see we are moving the needle now," Trahan says. "The heartening thing is when a dealer says, unsolicited, that things have improved a lot."
Press release from J D Power on Initial Quality Study, 2005