Case Scenario: CHRYSLEH'S TRANSMISSION PROBLEM
Chrysler pioneered its immensely popular minivan in 1934, which quickly became the best selling product the company had ever built. Within five years, Chrysler held more than 50 percent of the market share for mini vans. In 1989 Chrysler offered a new automatic transmission as an option in some of its top models of mini vans and luxury automobiles. The new transmission immediately ran into trouble when many customers reported serious problems.
Claiming that it had made improvement to reduce the initial problem, Chrysler continued to use the transmission. Mean while the Centre for Auto Safety, a consumer group that monitors the auto industry charged that Chrysler had not tested the transmission before introducing it. The group's claim was supported by data on owner complaints and frequency of repairs. During the first years of ownership itself, about 20 percent of the owners were reporting problems with the new transmission
For the 1991 model, Chrysler extensively modified the design of the vehicle but continued to use the same problematic transmission as standard equipment, with most of the larger engines in high demand. As a result, the Chrysler which was placed at the top in the magazine 'Consumer Reports' for many years, dropped to the bottom of the list in 1991, citing the transmission in particular as well as other signs of deteriorating quality. A new Toyota model captured the top spot that year.
Discussion Questions:
Q1. To what factors might you attribute Chrysler's failure to maintain market leadership?
Q2. What might Chrysler have done differently? How might a stronger focus on quality have helped?
(Source : James R. Evans and William M. Lindsay; "The Management And Control of Quality", 4th Edition, South-Western College Publishing, p. 34)