Global and Regional Quality Improvements

The following are key measures of our vehicle quality:

Global Warranty Spending

• Global warranty spending per unit declined 3 percent in 2009, compared to 2008 (excluding Volvo).
• Global warranty costs dropped by $0.8 billion, or 40 percent, over the 24 months from year-end 2007 to year-end 2009. Plans are in place to achieve another 9 percent improvement in warranty spending by 2014.

GQRS Initial Quality (Three Months in Service) Report

2010

• Ford had the fewest number of vehicle defects or "things gone wrong" among all full-line manufacturers in the first three months of ownership. (Honda's TGW are statistically similar to Ford's.) Owners of 2010 Ford, Lincoln and Mercury vehicles reported 1,107 TGWs per 1,000 vehicles – an 8 percent improvement compared to last year.
• Customer satisfaction rose to 84 percent, a four percentage-point gain over 2009 and statistically better than Toyota and Honda.
• In the United States, the following models led their respective segments in the GQRS quality survey:
  • Taurus – Satisfaction leader, D/E car
  • Fusion Hybrid – Satisfaction leader, C/D car
  • Milan Hybrid – TGW leader, C/D car
  • Focus – Satisfaction leader, C car
  • Mountaineer – TGW leader, Medium Traditional Utility
  • Expedition – TGW and Satisfaction leader, Large Utility
  • Navigator – TGW and Satisfaction Leader, Large Premium Utility
  • Ranger – TGW and Satisfaction Leader, Compact Pickup

2009

• "Things gone wrong" levels at three months in service decreased for the fifth straight year.
• Customer satisfaction rose to 80 percent, a three percentage point gain over 2008. For the first-quarter 2010 model year this figure has risen to 84 percent, putting us statistically ahead of all competitors.
• Customer satisfaction with interior quietness now far surpasses our competitors. Ford vehicles have fewer wind noise, squeak and rattle issues than any other volume automaker.

GQRS Durability (Three Years in Service) Report

Ford did a thorough review of all research during these difficult economic times and determined that our warranty data, Consumer Reports' data and data from the GQRS three months in service survey provided the information needed to identify customer concerns throughout the ownership cycle. Studies such as the GQRS Durability study were therefore discontinued.

Residual Value Improvements

• Resale values increased by 23 percent year-over-year on Ford vehicles with one to five years on the road – outpacing the industry average by 4 percentage points.
• Ford's residual values or predicted resale prices increased more than any other full-line automaker in the 2010 model year.
• Ford has the best residual values of any U.S. automaker, while several 2010 model year vehicles have better residual values than foreign competitors.

In the United States (in addition to progress noted above):

• In 2009, we discontinued tracking high time in service as part of the GQRS study, for financial reasons.
• The number of Ford, Lincoln and Mercury safety recalls decreased from 10 in 2008 to 8 in 2009, while the number of affected units increased from 1.6 million to 4.5 million. All but 12,000 of the 4.5 million vehicles recalled in 2009 are older models (1992-2003) that were equipped with faulty Texas Instruments speed control deactivation switches. Although the data shows the majority of the vehicles equipped with these switches do not pose a significant safety risk, we recalled them to reassure customers and eliminate any future concerns.
• Warranty spending decreased by 9 percent in 2009, compared to 2008.
• Customer satisfaction with Ford Division sales and service in 2009 showed mixed results, with sales satisfaction declining two percentage points from 2008 and one percentage point from 2004. The recent decrease is mainly attributed to the "Cash for Clunkers" program, which stressed dealer resources. Service satisfaction improved by approximately 10 percentage points from 2004,1 and sales satisfaction increased by approximately 5 percent from 2004.

In Europe:

• In the first quarter of 2010, TGW improved by 5 percent rate from 2009.
• In 2009, full year TGW increased by 24 percent compared to 2008.
• In 2009, overall customer satisfaction decreased by 4 percentage points to 59 percent compared to 2008.
• In 2009, sales satisfaction with dealer or retailer decreased by 4 percentage points from 2008 and by 2 percentage points from 2004. Service satisfaction with dealer or retailer decreased by 3 percentage points from 2008 to 2009, but has increased by 2 percentage points from 2004 to 2009.
• Warranty spending decreased by 15 percent in 2009, compared to 2008.

In Asia Pacific:

• The region logged 1,657 TGW in the first quarter of 2010, compared to 1,675 in 2009.
• Full-year 2009 TGW increased by 11 percent compared to 2008.
• Full-year 2009 customer satisfaction decreased by 4 percentage points to 48 percent compared to 2008.
• The sales and service satisfaction survey was not undertaken in Asia Pacific in 2009 due to its pending revision.2
• Warranty spending increased by 8 percent in 2009.

In South America:

• TGW improved 5 percent in the first quarter of 2010, compared to 2009.
• Full-year 2009 TGW improved by 3 percent compared to 2008.
• Full-year 2009 customer satisfaction remained at 68 percent, the same as in 2008.
• Warranty spending increased by 3 percent during 2009.

Owner Loyalty

Owner loyalty is a measure of customers disposing of one Ford product and buying a new Ford product. In the United States, owner loyalty increased from 41.6 percent in 2008 to 42.1 percent in 2009. In Europe, Ford owner loyalty decreased from 53 percent in 2008 to 49 percent in 2009.