Yes, most factory headunits these days are very decent in both sound quality (potential) and power output. Where they are let down is the absolute crap quality speakers manufacturers fit.
Shop around for a decent brand speaker with a high sensitivty level and you'll get decent sound quality and good volume levels. Aim for a speaker with 93dB sensitivty or higher. IMHO anything below 90dB sensitivity won't work well with a factory head unit. ( For every 3dB less sensitivity you'll need twice the amplifier power for the same volume level.
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If money is no object then check out some of the Focal range - either coaxial or components. They've got fantastic sound quality and very high sensitivity levels. I've got a set of their 6.5" components in one of my other cars running off the factory head unit. The bass increase, clarity and max volume level is amazing compared to the 5" factory component speakers they replaced.
One day I want to fit some to my XL-7......
