Toyota's Dismal Quality Survey Results -- Eww, What a Feeling

(MoneyWatch)  It was a deal with the devil when Toyota (TM) opted to sustain its sales with big discounts on Toyotas earlier this year. Sure, zero-percent loans moved the metal. Toyota sales were strong, even while Toyota recalled millions of units for problems related to complaints of unintended acceleration.

The downside is this: Toyota bought itself some market share, but couldn't buy itself any slack in the recent Initial Quality Study results from J.D. Power and Associates. Some of the same people who said, "Yes, thanks!" to zero-percent interest turned around and trashed Toyota in the survey.

The Toyota brand, which is usually at or near the top, fell from 6th place in last year's survey - already pretty low by Toyota standards - to 21st in the 2010 IQS survey, well below industry average. If there was one bright spot for Toyota, it was that the Toyota Yaris was one of the top scorers in its class. That suggests some satisfied entry-level customers who may stick with the brand as they buy bigger, better and more expensive cars.

The thing to keep in mind about IQS is that the survey is filled out by people who bought the product in question. It's not scientific, dispassionate quality testing performed by experts.

J.D. Power fielded the 2010 survey from February to March. The survey goes to people after 90 days of ownership. That was bad timing for Toyota. The timing meant some of the respondents bought their cars before the recall scandal, then got a survey to fill out after the scandal broke. They were probably shocked, after buying what they thought was a brand with bullet-proof quality.

However, some of the respondents must have bought their cars after the scandal broke, in the era of big discounts. Judging by the results, they found a lot of things wrong with their new bargain Toyotas.

Personally, I doubt whether on a factual, objective basis, Toyota products really had that many more problems crop up that they didn't have before. What can happen when a brand reputation takes a hit is that people start noticing problems that maybe they wouldn't have noticed before.

It's also completely up to the survey respondents to decide what they consider a "problem." That includes features and parts that aren't broken, that function like they're supposed to function. If the respondent decides they're a "problem," they're a problem. I bet Toyota has internal tests that show the cars in the 2010 survey in effect aren't any different, quality wise, from the cars in the previous survey.

But the perception of the Toyota brand has changed, at least for now, and that affected the results. The big question now is how long it will last. I predict that if you could track them, the bargain-hunters who wouldn't have bought Toyota except for the discounts earlier this year will turn out to be less loyal than the customers who bought them earlier.

Those discounts worked while they lasted, but they will continue to cost Toyota in other ways long after they're paid for.

Photo: Toyota