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Quality control takes backseat in fight for China's car buyers
Colin Velez
June 10, 2024
New research reveals a sharp uptick in the number of quality issues impacting new energy vehicle owners in China, with domestic brands outperforming their international counterparts in terms of satisfaction.
Why this matters: Automakers in the U.S. and Europe have grown increasingly alarmed at the speed with which Chinese manufacturers have cornered their domestic market and expanded beyond their country’s borders. Unfortunately, J.D. Power’s data suggests that companies on both sides are making questionable sacrifices for the sake of competitiveness, shedding light on what competition with China’s car industry could look like in the near future.
The data: J.D. Power’s New Energy Vehicle initial Quality Study examined the complaints of Chinese drivers within the first six months of ownership, focusing on both domestic and international brands. Here’s what they found:
The total number of problems per-100 vehicles (PP100) rose 37 points in just one year to 210 PP100.
Design-related problems rose by 35 PP100 (problems per 100 vehicles), the most out of any category examined
Domestic brands had the lowest number of complaints, averaging 201 PP100. However, this score reflects a 31 point increase from 2023.
International brands had the highest number of issues, averaging 218 PP100, up 54 points year-over-year.
Primary factors:
Driver assistance/Infotainment systems: the number of quality issues relating to software and hardware limitations, including low-quality camera images and poor navigation, rose the most out of any category.
Young owners: While overall satisfaction among car owners born after 1995 has improved since 2023, the number of quality complaints in this age group rose by 47 PP100. Issues with the driving experience (steering, suspension, etc.) were the most common.
Why are owners less happy?
While you may have expected domestic brands to beat the brunt of consumer dissatisfaction, J.D. Power’s research suggests that the most responsible party for this year’s increase in complaints are international automakers.
What’s changed: While foreign brands like BMW and General Motors used to dominate China’s car market, the dynamics have shifted rapidly in only a few decades. Last year, home-grown companies like BYD and Geely accounted for more than half of the country’s car sales for the first time in history.
Key Quote: "The competition in the NEV market is intensifying, with automakers constantly launching new models to capture market share. This has led to significant challenges in quality management as development cycles shorten.”
Market share over quality: Faced with this unprecedented competition, international automakers have been forced to change tactics, apparently shifting focus away from quality control to stay more competitive in other areas.
Bottom line: While there are a number of factors at play here, it goes without saying that the people who pay the highest price for poorer quality are consumers. If automakers are willing to prioritize market share ahead of their buyers to stay competitive with Chinese brands, it doesn’t paint a pretty picture of what’s to come.
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