Saturday, February 06, 2010

Doubting the Ratings

It's suddenly become quite fashionable to go after various companies and rating services, particularly Consumer Reports (CR), for auto ratings that have long declared Toyotas to be reliable and recommended.
The consistently strong ratings Toyota vehicles have received over the years from Consumer Reports, and other consumer auto sites have fueled sales and helped the Japanese company surpass General Motors last year as the world's largest automaker. However, for many consumers, those ratings now appear to fly in the face of serious safety issues spotlighted by the sticky-pedal recall and a separate recall Toyota expanded last fall, aimed at stopping gas pedals from getting caught in floor mats. Both recalls stem from hundreds of complaints of sudden unintended accelerations in Toyotas that have allegedly been linked to more than a dozen fatalities since 1999.

Auto safety experts say consumers might need to adjust their expectations about ratings from private groups because of the limited nature of their testing and the degree to which they rely on government and industry testing that itself is in large part based on trust. And their recommendations are no substitute for proper surveillance by regulators and manufacturers.

Some of the most strident criticism has been reserved for Consumer Reports, which accepts no advertising and is among the most respected reviewers. On Jan. 29, three days after Toyota announced the latest recall, the magazine suspended its recommendations for eight models, citing concerns raised by the recall. Jim Guest, president of Consumers Union, the publisher of Consumer Reports, said in a statement it was doing so because "the vehicles have been identified as potentially unsafe" and "without a fix yet being available to consumers . . . our position is that you shouldn't compromise on safety."

The move sparked a backlash on the magazine's Cars Blog. One reader who identified himself only as Kevin wrote, "instead of giving an automatic 'recommend' rating to Toyotas, don't your think your readership (much of whom looks to you -- and only you) deserves thorough retesting of all Toyotas and revised ratings based on said testing?"
Considering that the reliability rating comes from Consumer Reports' members satisfaction surveys, blaming CR for recommending the cars for years is misplaced.

Toyota rightfully got those ratings for all those years precisely because the cars were deemed reliable by the very drivers who were reporting. The acceleration issues aren't something that would necessarily come up during testing - unlike the rollover hazards uncovered in CR tests with the Suzuki Samurai years ago that pretty much ended that brand's efforts in the US. It was a problem that would develop over years of time and might not be readily apparent from people who had few problems with their cars.

CR has taken the step of eliminating the recommended ratings from Toyota - and that will have a lasting effect with the company since many people look to CR for its auto ratings when buying cars - both new and used.

A major reason that Toyota overtook GM in car sales was that it began targeting car rentals - fleet sales - which was a bastion long held by GM, Ford and Chrysler, and while they don't provide the profits of sales directly to consumers, they are an area in automakers look for bulk sales. Moreover, the fleet sales took a hit as the recession hit and the fleet purchases declined. With Toyota having a smaller exposure to the fleet sales, it didn't take as strong a hit. Moreover, the GM cars did have reliability issues according to CR consumers who reported their findings to CR - and which made up the long term ratings for the cars. That's why they didn't get recommended ratings.

That isn't to say that you can always trust CR with its ratings. I recently purchased a LED television and CR tested flat panel televisions and gave my particular model a middling rating - not checking it off as a best buy or a recommended. I'm not quite sure how they arrived at that conclusion, even though the tv used significantly less power than any other model and would be cheaper to run over the life of the unit. I find that the picture quality is pretty good and the sound isn't nearly as bad as they claim (and many people use their home theater setups to boost the sound anyways).

Then, there's the issue of retailers. Last year, CR rated electronics retailers, and they notably left B&H Photo off their recommended list, even though the company is widely considered the best place in the US to get camera gear. They know more about cameras than most people have forgotten and their New York store is a mecca for camera enthusiasts (and they now have all kinds of electronics gear for sale there as well - computers, televisions, video, etc.). People come from all over the country (and around the world by the sound of those who walk through the store) to buy their gear and the prices are quite competitive with the other stores (both bricks and mortar and online only).

They rated B&H at the top of the list, but downgraded because of the return policy. J&R got a recommended rating, even though it falls short of B&H in every category except the return policy, which isn't to say that J&R isn't a great place to buy stuff - I get gear from there all the time. It makes little sense, when CR gives Apple a recommended rating, even though it gets worse than average ratings for price, selection, and the same return policy as B&H. What gives there?

So, the real issue is not CR and its ratings, but how Toyota is dealing with this mess - the brake issue on its Prius models and the acceleration issue on nearly every other car it's made for the past couple of years. The company is falling short on its ability to fix the problem, and that the problem may not be in the mechanical systems but the electronics is a serious concern given that it's an electronic problem that is behind the braking issue with the Prius (and certain Ford hybrids).

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