Bad fit: Fiat's quality lags--like Chrysler's

Chrysler is betting its future on Fiat's vehicle expertise, but there's a problem: Fiat's quality is below average in Europe, according to a series of studies.

The quality issue is one more challenge facing Chrysler LLC as it emerges from U.S. Bankruptcy Court.

Chrysler, which has been dogged by its own reputation for substandard quality, plans to derive six small and mid-sized models from Fiat platforms. They are due in U.S. showrooms in a relatively swift 18 to 24 months.

Chrysler's engineering group, short-staffed from widespread layoffs, must learn Fiat methods. Some Chrysler plants will be retooled for Fiat's vehicles, and the work will be done on deadline as Chrysler survives on money from U.S. taxpayers.

Fiat posted low scores on J.D. Power and Associates' 2008 Customer Satisfaction Index studies for France, Germany and the United Kingdom. The respondents had owned their cars for about two years.

Fiat is "below average in each of three markets that we measure -- Germany, France and the U.K. -- particularly in terms of vehicle quality and reliability," says Dave Sargent, vice president of automotive research at J.D. Power.

Fiat scored in the bottom quarter of more than 20 brands in the three countries in vehicle quality and reliability.

"Fiat has a reputation of having had quality issues over many years," Sargent says. "We know they are working hard to address those issues, but so is every manufacturer. Fiat is challenged in terms of quality. They still have some work to do."

Faulty Fiat

Fiat finished 20th of 25 brands in J.D. Power's 2008 Customer Satisfaction Index Study in France. A sampling of brand rankings and scores

1. BMW (top score): 815
6. Toyota: 803
12. Ford: 792
Industry average: 791
20. Fiat: 766
22. Chrysler: 756
26. Suzuki (bottom score): 747

*Note: Power weighed responses of customers in France after about 2 years of ownership: Vehicle quality and reliability, 38%; vehicle appeal, such as performance of engine and comfort, 22%; ownership costs, 20%; service satisfaction, 19 percent. Percentages don't equal 100% due to rounding. The weightings varied in the German and the United Kingdom studies.

Fritz Indra, former executive director of advanced engineering at GM Powertrain, says that for powertrains, "Fiat had a bad reputation in Europe, but it improved over the last years." Indra is now a consultant.

Fiat disagrees with Power's findings.

"We have other surveys from independent organizations that we believe are more credible [such as one from] the ADAC -- the German motor club, which has a huge membership of millions -- which contradicts some of the findings you may have," says Richard Gadeselli, vice president of Fiat S.p.A. communications in Italy.

"We find that many of these reports, customer satisfaction reports, tend to be about four to five years behind the curve. In fact, in a lot of these reports, they are talking about Fiat models that we no longer manufacture."

The 2008 J.D. Power studies give vehicle quality and reliability the highest weight. But other nonvehicle matters are considered, such as insurance. Fiat was rated above average in only one category: ownership costs, which include fuel consumption, insurance and repairs.

Last week, Chrysler public relations referred questions about Fiat's quality to Fiat.

(Source: Automotive News)