EVOLUTION OF PRODUCT QUALITY IN US AND JAPANESE AUTOMOTIVE FIRMS: AN EXPLORATORY LONGITUDINAL ANALYSIS

摘要

For years we have been hearing that US automobile manufacturers have been losing marketshare to their Japanese rivals who are reputed to make better quality vehicles. Most such reportsare based on the initial quality surveys on new automobiles. In this paper we address twoexploratory questions: (1) how does the quality of an automobile change with its age, and, (2)can firm level variables help explain differences in the way quality changes with age? To answerthese questions, we collected Consumer Reports' reliability ratings on approximately 200automobile models made by the Big-6 firms. Our data includes model years 1998-2007; thusmodel ages range from 1-10 years old. We found that not only do automobiles made by34802Japanese firms have higher initial quality, but, as automobiles get older the difference in theproduct quality between US and Japanese firms increases. We also found that the moregeneralist a US automobile firm, i.e., the wider is the US firm's product offering in themarketplace, the lower its overall automobile quality. Conversely, Japanese generalist firmswere found to have higher quality than specialist firms. The result is partly explained by the factthat Japanese firms have taken a different path to broadening their product variety – they haveensured a high level of quality of their initial offerings before entering newer market segments.We conclude by noting limitations of our work and suggesting directions for future research.