For two decades, US automakers have struggled to close a vast quality gap with their rivals. To be sure, Detroit has improved considerably: US auto defect rates fell by nearly 80 percent from 1980 to 2001, according to the 2001 Consumer Reports auto survey. But the Big Three still lag behind some foreign competitors, primarily the Japanese, by most quality measures.

This lingering gap prefigures a continuing slide in market share, but now another dimension may be of greater concern to the Big Three: over the past few years, consumers have changed their ideas about what defines quality—a shift that is making the uphill climb for US automakers even more steep. Though buying decisions once emphasized quality defined as minimizing the number of defects in a car, consumers are now focusing more on maximizing the appeal of a handful of core product attributes—for example, whether the car is fun to drive, well designed, or stylish.¹ This shift is due in part to Detroit’s very success in bringing the product defect rates of new cars to levels so low that a defect-free vehicle is now largely taken for granted. As a result, quality today is not only about getting...