Toyota Remains on Tops in Vehicle Quality With South Koreans Gaining

DETROIT April 28, 2004; John Porretto writing for the AP reported that the average initial quality of new cars and trucks rose significantly in the past year, and once-suspect South Korean brands topped U.S. and European rivals for the first time, according to a closely watched study of 2004 models released Wednesday.

Overall, initial-quality problems dropped 11 percent from 2003, according to the annual report from J.D. Power and Associates. The industry average of 119 problems per 100 vehicles in 2004 was the lowest since the study was redesigned in 1998.

Among the 169 models included in the most recent study, 129 posted improved results, 35 saw quality decline and five were unchanged.

Toyota Motor Sales USA Inc., which includes the Lexus luxury brand, repeated as the company with the highest overall initial quality. Toyota Motor Sales had 101 problems per 100 vehicles -- 18 fewer than the industry average.

But South Korean-branded vehicles, led by Hyundai Motor America, made marked gains. Hyundai, in particular, was the most improved of the 37 total nameplates, scoring 29 percent better than 2003 and moving up 16 positions to rank seventh.

South Korean models from Hyundai and Kia Motors America had 117 problems per 100 vehicles this year. That was five fewer on average per 100 vehicles than their European rivals, and six fewer than U.S. brands. The South Koreans still trail Japanese nameplates by six problems per 100 vehicles, though the Hyundai nameplate topped even perennial quality stalwart Toyota in the 2004 survey.

"The change really started with Hyundai Motor Co. chairman Mong Koo Chung. Quality is his mantra," said Hyundai Motor America chief Bob Cosmai, who was in South Korea on Wednesday. "The chairman is very happy and pleased with these outstanding results, but he points out that this is just the first step and we're just getting started."

Toyota's Lexus brand was again tops among all nameplates with 87 problems per 100 vehicles -- six fewer than No. 2 Cadillac. Those same brands were first and second, respectively, in last year's study, although Cadillac then trailed Lexus by 27 problems per 100 vehicles.

"A decade ago, as Korean manufacturers struggled with a universally poor reputation for vehicle quality, no one would have predicted they could not only keep pace but actually pass domestics (U.S. brands) and other imports in terms of initial quality," said Joe Ivers, J.D. Power's executive director for quality/customer satisfaction. "This demonstrates how vastly more competitive the market has become -- which is good news for consumers, who will ultimately benefit."

The study, in its 18th year, is based on responses from more than 51,000 people who bought or leased new 2004 cars and trucks. Surveys were done in the first 90 days of ownership.

Among manufacturers, No. 1 Toyota was followed by American Honda Motor Co. and Hyundai (both with 102 problems per 100 vehicles) and BMW of North America (116.) Those were the only automakers to score better than the industry average.

One company that registered a big drop since last year, Nissan North America, has had a few major product launches. Such upticks are not uncommon when manufacturers introduce new vehicles.

Each of Detroit's automakers showed year-over-year improvement. General Motors Corp. fared best, with 120 problems per 100 vehicles, an improvement from 134 problems last year. In a breakdown of nearly every nameplate available on the market, GM had two brands in the top five -- Cadillac (93) and Buick (100) -- a repeat of last year.

Kevin Williams, GM's vice president for quality in North America, said he didn't think a rash of recalls in the first quarter of 2004 -- totaling several million vehicles -- would affect GM's performance in future J.D. Power surveys. But Williams added, "The area of recalls is a concern inside the company and we're working extremely hard to reduce the number."

DaimlerChrysler AG had 123 problems, 16 fewer than last year. Ford Motor Co. had 127 problems, an improvement from last year's 136.

Louise Goeser, Ford's vice president for quality, said she was particularly pleased with the results given Ford's roll out late last year of its top-selling vehicle, the F-150 pickup.

"If you go back to last year, when most of the major competitors went negative, it was attributable to launches," Goeser said. "Here we had literally the biggest launch there can ever be ... and we made significant improvement."

Other nameplates reporting significant improvement: Honda and Hummer (both 23 percent), Land Rover (22 percent) and Jaguar and Mercedes-Benz (both 20 percent.) Hummer, however, remained last among brands with 173 problems per 100 vehicles.

Porsche Cars North America Inc. ranked last among automakers with 159 problems per 100 vehicles, followed by Kia (153.) Still, Kia's score was 9 percent better than a year ago, boosting the overall South Korean performance.

J.D. Power and Associates: http://www.jdpa.com