Fiat Chrysler Automobiles (NYSE:FCAU) finally scored a big win in a quality survey.
Consulting firm Strategic Vision, which focuses on quality assessment and customer satisfaction, last week named Fiat Chrysler Automobiles the big winner in the 2015 edition of its Total Quality Awards.
It was an important win for FCA, which is often castigated for issues with its products. But it's important to note that Strategic Vision defines "quality" a bit differently than most -- and that difference sheds some interesting light on the recent success of Fiat Chrysler in the U.S.
What does "quality" mean in autos?
What makes the Strategic Vision Total Quality Awards different is its definition of "quality." Unlike the well-publicized quality reports from Consumer Reports and J. D. Power, which count problems with vehicles over time, Strategic Vision considers a long list of other factors that contribute to a customer's overall satisfaction.
That problem-counting approach is useful. But Strategic Vision makes the point that it's not the only way to define "quality" -- and given the drastic improvements made by all of the major automakers in recent years, it may not be the most useful way anymore.
"Simply counting problems once had a place in history, but today, knowing what creates love and that which enhances the customer's perception of quality are key to determining what is best," said Strategic Vision president Alexander Edwards (emphasis added).
As Edwards points out -- and it's a fair point -- manufacturing and engineering at all of the global automakers has improved so much over the last two decades that the difference between the "worst" and the "best" in rankings such as J. D. Power's is often only about half a problem per vehicle.
Much is made of those differences -- but still, many consumers happily buy cars from the lower-rated manufacturers. Why?
That's the question Strategic Vision seeks to answer.
When it's about more than counting problems, FCA's best products shine
This was FCA's first win since the Total Quality Awards were instituted in 1995. Its Fiat 500 and 500e, Dodge Charger, Dodge Challenger, Jeep Wrangler Unlimited, and Dodge Durango were all winners of their respective segments.
What do all of those vehicles have in common? It's probably not "quality" as it's normally understood -- Fiat in particular regularly ranks near the bottom of most conventional problem-counting assessments of quality.
It's this: People love them.
Think about it. The quirky 500, Dodge's big muscle cars, and the iconic Jeep Wranglers all sell (in part, at least) on strong emotional appeals. They may have somewhat more problems than other models, but they make up for it with personality and charisma that attract plenty of buyers -- and they leave those buyers happy with their choices even after a few problems.
FCA isn't the only company to have mastered this formula. General Motors also topped several categories in the survey with products like Chevrolet's Corvette sports car and Colorado midsize pickup and its big Cadillac Escalade SUV. (GM and Volkswagen Group were just behind FCA in the survey's overall rankings.)
As Strategic Vision sees it, that kind of customer satisfaction is a more useful definition of "quality" nowadays.
FCA still has work to do on the other kind of "quality"
I'd argue that the problem-counting kind of quality still counts for a lot. In that arena, Fiat Chrysler still has work to do. The company's resources are spread very thin at the moment, as it rushes to complete a slew of new global products. In some places, that thinness is starting to show.
But surveys like Strategic Vision's help us understand why, for instance, FCA's U.S. sales were up 16% last year despite dismal-looking showings in more conventional quality assessments. FCA has a knack for developing products that attract loyal followings of owners -- and importantly, for listening to those owners and retaining their loyalty over time.
That counts. Whether it counts as "quality" is up for debate. But it's an important factor in the company's recent success.
John Rosevear owns shares of -- and The Motley Fool recommends -- General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.