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Euro-models Perception Problem, GM Extends Warranties

Who says European models are the best made cars out on the road?
The latest survey of new car buyers from CNW marketing research shows the perceived quality of European brands continues to slide. While Volvo, Audi, and Porsche have higher perceived quality compared to a similar survey in 1997, Mercedes, BMW, and VW are all lower. In fact, Mercedes has gone from #1 to #12 in CNW's quality perception survey. The only silver lining for the Euro brands is that they are still given high marks by car buyers.

The problem is that the perception of their reliability has taken a hit, while other nameplates like Toyota, Lexus, Cadillac, and Hyundai have improved their reputations for quality.

This may be a fall-out from reliability questions in recent years for some of the "Legendary" European brands.

GM's Warranty Extension
In the clearest sign yet that GM is intent on improving not only it's image, but also the residual sale value of it's cars and trucks, the world's #1 automaker is now offering 5 year/$100,000 mile powertrain warranties on it's certified used "02-"06 models. Why? If GM can boost the resale value of it's brands, it could eventually help the automaker generate more demand for it's cars and trucks. GM can extend the new powertrain warranty because the cost of supporting these warranties has dropped substantially in recent years. Yet another indication, GM's push to improve quality appears to be paying off.

Questions? Comments? BehindTheWheel@cnbc.com

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