What is lesser known to the general public is that Mach 18 isn't just about numbers. It's about quality. And for many people, quality doesn't mean just fit and finish, or the sound a door makes when it's closed. It means reliability, which has been something of an Achilles' heel for Volkswagen in the North American market. Fortunately, Volkswagen executives recognize that one of the things that's been holding back sales in the U.S. is the perception that VWs are less reliable than other makes, and the company is committed to doing something about it. The goal is to move the brand into the top five in every category: from J.D. Power's I.Q.S. (Initial Quality Survey), to the long-term Vehicle Dependability Study, the APEAL Survey (Automotive Performance, Execution, and Layout), and having as many models on Consumer Reports' Recommended List as possible.
So far, Volkswagen is succeeding. Forbes magazine recently named the '15 Passat 1.8T "The Most Reliable Midsize Car," and Consumer Reports rated it one of its "Top Ten Under $25,000," with expected reliability of 59 percent above average.
Further evidence of VW's progress is provided by looking at warranty claims. When you take your car into a dealership for service and have something repaired under the warranty, it results in a Repair Order being written by the service department, which in turn files a claim with the manufacturer to reimburse the cost of repair. Ideally, if the cars you're making are good, your warranty claims should be low. Historically, Volkswagen warranty claims have been higher than average when compared to the rest of the industry.
All that is changing due in large part to the efforts of two individuals. One of these, 35-year veteran Marc Trahan, is recently retired. Under Mr. Trahan's leadership as head of quality at Volkswagen Group of America, VW warranty claims plunged by 40 percent from 2010 to 2013. After Mr. Trahan's retirement in 2014, the baton was passed to Stefan Schueller, formerly head of Product Safety and Reliability at Audi. Mr. Schueller has maintained the pace established by his predecessor. In the past year, warranty claims have dropped by another 10 percent. Volkswagen warranty claims are now at the lowest level they have been in the company's history.
We took the opportunity to sit down with Mr. Schueller to find out how this has come about.
European Car: How was Mr. Trahan able to make such drastic improvements in such a short period of time and has the pace plateaued or can you continue the level of improvement?
Stefan Schueller: I have known Marc Trahan for approximately 20 years. He was technology driven and always focused on delivering the best quality possible. He had a good relationship with the important people in Germany to address any concerns, and I'm following the same approach. As a result, model year 2015 looks good so far.
EC: Volkswagen quality is much better than it was 10 or even 5 years ago. However, there is a perception in America that VW quality is lacking, when compared to the Japanese makes. Do you think about this, and how do you change the perception?
SS: We have two different types of consumers who don't buy our cars: the avoider and the rejecter. The good thing with the rejecters is that they are still interested in the brand and they keep themselves informed about the brand. The further good news for us with these potential consumers is they are able to see that we get more and more cars "recommended" in Consumer Reports.
EC: Why isn't the drop in warranty claims something VW brags about in its advertising?
SS: A drop in warranty claims is more of an internal measurement.
EC: One concern many people had when Volkswagen built the Chattanooga plant was that the first car produced at a new plant, the Passat, would have problems. But from everything I've read, the quality of the new Passat has been excellent.
SS: Yes, and we are proud of the quality. If you look at the newest recommended model in Consumer Reports, it's the Passat 1.8t. Consumer Reports states it "expects reliability will be 59 percent above average."
EC: As VW spends 7 billion dollars or more expanding factories in the U.S. and North America, do you fear that the push for greater production and hitting your 2018 sales goals may cause quality to suffer? What is being done to prevent it?
SS: I personally think it is a fantastic statement that Volkswagen is investing so much in the market, including an R&D center in Chattanooga. With this development, we are closer to the market and what the customer needs. At the end of the day, we have a solid process in place for releasing cars to the market, and it is the same for any car produced in Germany or in North America-so there's no deviation when it comes to quality.
EC: Is there one specific thing that Volkswagen needs to do now? Is it a matter of creating new processes or simply continuing what you have been doing?
SS: Volkswagen needs to understand the customer needs. We are on the right track with our forum for customer satisfaction with the board of R&D in Wolfsburg. We can bring any topics to that forum if we think we need a better solution for our market. I'm not talking only about existing models; I'm talking about the future products to come in 2017 and later.
EC: I've heard that VW is considering coming out with a very long warranty, perhaps 110K or 120K miles, which will be the longest in the industry. Is this true?
SS: Even if this were true, we wouldn't comment.
EC: Is it economically feasible to offer such a warranty? When Carefree Maintenance was first introduced, it was for three years. But it was found that it cost more than projected and did not help sales, so for the '15 models, it is for one year. Would a longer warranty face the same fate?
SS: When VWoA introduced the Carefree Maintenance Program, there was a perception that our products were not as reliable as some of our competitors' vehicles and that the cost of ownership, including regular servicing, was higher than our rivals. Since then, our warranty data and other metrics show that our reliability is steadily improving and that the true cost of long-term ownership is decreasing, hence the change to a shorter CFM period.
EC: When you were head of Product Safety and Reliability at Audi, that brand moved from the middle of the pack into the Top 10 and even the Top 5 in J.D. Powers & Associates Initial Quality Survey and has stayed there. How did you achieve this?
SS: Audi worked hard on the quality level, and it is at its best ever. I will say we got a magnificent improvement over the past 10 years with these complex products. I was running the Q-Circle at that time, with the board members participating. And every bigger issue was on the table-to be analyzed and fixed.
EC: Is this possible for Volkswagen, to be in top 5 in every category in such a short time?
SS: Absolutely, and we are on a good path. By the latest, I see the VW brand in the top 5 as well by 2019. Have a look at what is coming with MY 16. The new infotainment system that we showed at the CES in January will be best of its class, bundling Apple CarPlay with Google's Android Auto and MirrorLink. This is exactly what the customer wants-especially the younger customers.