Honda, Porsche lead J.D. Power quality study

updated 5:10 p.m. ET June 4, 2008

DETROIT - The quality of new cars improved across the industry this year, with Porsche, Honda, Toyota, General Motors and Ford among the automakers leading the pack, the marketing and consulting company J.D. Power and Associates said Wednesday.

Porsche was the top brand in J.D. Power’s annual ranking of initial vehicle quality, which measures both mechanical and design problems in the first 90 days of ownership. Others in the top five were Nissan Motor Co.’s Infiniti, Mercedes-Benz, and Toyota Motor Corp.’s Lexus and Toyota brands.

In rankings by vehicle segments, Honda was the only brand with three winners — the Fit subcompact, Civic small car and CR-V crossover. Toyota, General Motors Corp. and Ford Motor Co. had three winners each across all their brands. Overall, 26 of the 36 nameplates in the rankings improved from last year.

Chrysler LLC’s Jeep was the worst performing brand, with 167 problems per 100 vehicles. Other brands in the bottom five were BMW AG’s MINI, Land Rover, GM’s Saturn, and Suzuki.

David Sargent, vice president of automotive research at J.D. Power, said the most improved vehicle this year was the Volkswagen Passat. He also cited the Chevrolet Malibu and Infiniti EX-Series, saying both vehicles had strong launches with relatively few problems, which is rare for all-new vehicles.

J.D. Power says overall quality improved to an average of 118 problems per 100 vehicles from 125 problems last year. Vehicle quality has steadily improved over the last decade; there were 176 problems per 100 vehicles in 1998.

The rankings were based on questionnaires from 81,500 people who bought or leased new 2008 vehicles between November and January. The questionnaires ask 228 questions on issues from handling, braking and engine trouble to seat comfort and stereo systems. Sargent said consumers reported that quality was up in every category except audio, entertainment and navigation systems.

The rankings are closely watched by automakers and are frequently used in advertising despite persistent questions about whether they show any real statistical difference between automakers. For example, if Jeep has 167 problems per 100 vehicles, that equals 1.67 problems per vehicle, making the difference with Porsche — at 0.87 problems per vehicle — seem less significant.

Sargent said there are more profound differences in the numbers for individual models, which aren’t released publicly but are shown to automakers.

“Most brands produce some very good cars, and many brands produce some cars or vehicles which are not so good,” Sargent said during the release of the numbers before a meeting of the Automotive Press Association.

Video   Detroit bites back June 4: U.S. automakers are making better cars according to the latest J.D. Power and Associates’ annual ranking of initial quality. CNBC

He also said that even though the differences seem insignificant, they have an effect on consumers and whether they will stay with a brand or recommend it to others.

“For every small, incremental increase in quality, you will get more customers coming back to your brand,” Sargent said.

Sargent said rising gas prices had some effect on the rankings this year. While the average number of problems with vehicles’ fuel consumption stayed the same as in 2007, the owners of large vehicles were more likely to complain about high fuel consumption, while the owners of small vehicles were less likely to complain.

“I believe this is entirely due to increased gas prices and people’s sensitivity to the issue,” Sargent said.

Sargent also said hybrid vehicle owners were also slightly more likely to complain about fuel consumption.

J.D. Power also gave awards to the plants which produce the vehicles with the fewest mechanical complaints and defects. The Mercedes-Benz plant in Sindelfingen, Germany, was the best overall, averaging 33 problems per 100 vehicles. In North and South America, the winner was the Toyota plant in Baja California, Mexico, which produces the Toyota Tacoma. In Asia, the top plant was Toyota’s Fujimatsu plant in Japan, which makes the Toyota Prius.

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