Korean Automaker Passes U.S. and Europeans in Quality Survey

April 28, 2004 Korean Automaker Passes U.S. and Europeans in Quality Survey By DANNY HAKIM

ETROIT, April 28 ? Hyundai, the Korean automaker, surpassed domestic and European manufacturers for the first time in J. D. Power's closely watched initial quality rankings.

The result was a coup for Hyundai, which has been taking on the formidable challenge of recasting its image from cheap to classy, or at least respectable.

"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 the pace, but actually pass domestics and other imports in terms of initial quality," said Joe Ivers, executive director of quality and customer satisfaction at J. D. Power.

There are caveats, however. Hyundai's Kia brand continues to be a subpar performer in the initial quality rankings, released today. And in J. D. Power's most recent study of long-term reliability, considered a more important quality barometer, the Hyundai brand ranks near the bottom and Kia was the industry's least reliable brand.

"We really want people to see us as a great value automobile," said Chris Hosford, a spokesman for Hyundai. "Part of value is price, part of value is getting a lot of features and equipment for what you spend, and part of it is definitely having a great quality car."

Improvements in initial quality, he said, inevitably lead to longer-term improvements.

"One leads to the other," he said, adding, "we've got to now drive forward and continue these improvements."

So what is initial quality? J. D. Power surveyed 51,000 new car and truck buyers in the United States in February and March, asking them whether they experienced 135 potential problems in the first three months of ownership. The most persistent complaint continued to be wind noise audible inside cars. Fuel economy was again a top 10 complaint, but less so than last year, even though prices were higher than in 2003.

"We had fewer complaints of excessive fuel consumption this year," said Brian Walters, J. D. Power's senior director of vehicle research. "It suggests consumers are adjusting to higher fuel prices."

The survey data is closely watched by the industry, though its importance has somewhat diminished as initial quality gaps between automakers have narrowed dramatically. Gaps remain far more significant in long-term reliability, which affects residual values of automobiles.

But the initial quality report is an important reflection of how well new cars and trucks live up to customer expectations.

Japanese brands scored the best, averaging 111 problems per 100 vehicles. Korean brands averaged 117 problems, European brands 122 and domestic makes 123 problems. In 1998, the gap was much wider, with Korean brands the worst at 272 problems per 100 vehicles and European brands best, at 156.

Of course, sorting out what brand belongs to what region is getting pretty complicated in the global marketplace. For instance, Saab and Jaguar count as European brands even though they are owned by the American automakers General Motors and Ford Motor.

G.M., Ford and DaimlerChrysler continue to rank below the industry average, when measured companywide, but just barely. G.M.'s Hummer brand made marked improvement over last year but continues to be the most problem-prone brand in the industry. Several Detroit brands did come in at the top of the rankings, including G.M.'s Cadillac brand, which was second only to Toyota's Lexus brand.

Toyota's initial quality remains the best in companywide comparisons, though it came with a wrinkle this year. The company's new youth brand, Scion, made its debut near the bottom of the charts.