California Management Review

Abstract

This article explores the rise to quality leadership by Japanese automakers, the decline in U.S. automakers’ quality reputation and whether poor quality still contributes to the U.S. automaker’s competitive woes. Perception plays a key role in quality competition but not necessarily in ways that we commonly think. The ways in which information about quality performance is displayed plays an important role in customer perception. Quality should not be seen as a standalone asset but rather it must be understood in the context of other assets, including a firm’s brand equity. It is quality’s relationship to brand equity that helps explain the current quandary of U.S. automakers and this relationship holds lessons for other industries.

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