Ford Motor Co. may save as much as $300 million on warranty costs next year because of improved design standards and manufacturing technology, the company's top quality executive said Friday.
That will be in addition to $900 million in expenses Ford trimmed this year because of fewer dealer repairs after cars and trucks leave the factory, Vice President Bennie Fowler said in an interview.
“The numbers that we're targeting, probably another $200 to $300 million, would be in line, certainly in line with the substantial improvement we made this year,” Fowler said of prospects for savings next year.
Ford is trying to win back buyers and end 11 consecutive years of U.S. market share declines. A survey commissioned by the Dearborn-based company found that its five-year effort to improve quality was cutting problems to near the level of Toyota Motor Corp., the industry's perceived leader.
The survey of 60,611 new Ford car or truck owners from September 2006 through February 2007 found 1,427 reports of “things gone wrong” per 1,000 vehicles, 159 fewer than last year, Ford said in June.
The survey, by RDA Group in Bloomfield Hills, found Toyota owners reported 1,362 problems per 1,000 vehicles.
In June, Ford had four of the top 10 brands in the annual initial-quality survey by J.D. Power & Associates. Ford's Lincoln brand ranked third, with Jaguar sixth, Mercury eighth and the namesake Ford brand 10th.
The warranty savings, now being used to offset losses after a record $12.6 billion shortfall last year, will eventually allow increased spending on future new models, Fowler said.
“It has improved our earnings quite substantially,” Fowler said.
