Hyundai joins Toyota, Honda atop quality list

It was only a few years ago that Korea’s Hyundai was considered a second-tier auto brand, inferior in quality to better-made Japanese and American models.

Those days are rapidly fading into history, according to a survey that ranks Hyundais with Toyotas and Hondas as the most reliable cars sold in America.

Hyundai rose from No. 10 last year to tie for second place with Honda, slightly behind perennial No. 1 Toyota, according to the J.D. Power and Associates survey. The three companies easily outranked No. 4 BMW and No. 5 General Motors in the study, which measured problems reported in the first 90 days of ownership for 2004 models.

Just six years ago Korean brands, including Kia and Daewoo, struggled against a reputation for poor quality, with owners reporting an average of 2.7 problems per vehicle in the first 90 days of ownership, according to J.D. Power. That figure has dropped 57 percent to fewer than 1.2 problems per vehicle.

Free video Hyundai breaks through on reliability survey April 28: J.D. Power & Associates' Joe Ivers discusses the quality of new vehicles made both domestically and internationally. CNBC

For Hyundai brand cars, the number is close to one problem per vehicle, comparable with Toyota and Honda.

The comparison is not exactly fair, because Hyundai sells a relatively limited lineup of U.S. models, while  Toyota, Honda and the Big Three carmakers each market several dozen "nameplates" under multiple brands. And Hyundai owners reported more problems in the crucial engine and powertrain areas, said Brian Walters, senior director of vehicle research at J.D. Power. Still, Hyundai's performance is "nothing short of extraordinary," he said.

The improvement in the Korean brands is part of an overall improvement in auto quality, according to J.D. Power officials. Overall, complaints about initial car quality dropped 11 percent in the past year, and 76 percent of models showed an improvement from the 2003 to 2004 model years, according to the survey.

Among individual “nameplates,” luxury brands Lexus, Cadillac and Jaguar stood at the top of the list with less than one problem per vehicle on average. But a high price paid was no guarantee of a worry-free automotive experience. Owners of General Motors’ super-heavy Hummer brand sport-utility vehicle that lists for $50,000 and up, reported an average of 1.7 problems per vehicle, the most of any brand.

Volkswagen and Porsche also ranked poorly in the study, although the Porsche 911 still ranked as the top premium sports car, ahead of the Honda S2000 and Nissan 350Z. Porsche was hurt by its introduction of the Cayenne sport-utility vehicle. Carmakers often encounter initial quality "bugs" in new models.

The Toyota Corolla was the top-ranked compact car, and the Hyundai Sonata, with a base sticker price of $16,000 was No. 1 among so-called entry-level midsize cars, ahead of the Oldsmobile Alero and Chevrolet Malibu.

GM's Buick Century was at the top of the competitive "premium midsized" category, outranking the Toyota Camry, Honda Accord and other models. The Mercury Grand Marquis and Dodge Stratus Coupe were among other top-ranked American-branded cars.

Among pickup trucks, the Ford Explorer Sport Trac, Toyota Tundra and Dodge Ram HD were all tops in their categories.

The J.D. Power study surveyed 51,000 people who bought or leased new 2004 model year cars and trucks. The study is one of two major vehicle quality surveys produced annually by J.D. Power, which sells the data to car makers.

The other survey measures problems reported in the first three years of ownership, which is considered more important factor to prospective buyers than initial quality. In that study, released last July, Porsche ranked No. 1 for the 2000 model year.

Toyota, ranked first among companies with a full lineup of vehicles, followed by Honda and Nissan. Korea's Daewoo and Kia were at the bottom of the list. Daewoo models are no longer marketed in this country.

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