Sedans move along a conveyor belt on the production line at a manufacturing plant in Ulsan, South Korea. (Photographer: SeongJoon Cho/Bloomberg)

Porsche Takes a Back Seat as Korean Cars Grab Top Quality Honors

(Bloomberg) -- Korean automakers have scored a trifecta, with the Genesis, Kia and Hyundai brands topping Porsche and taking the top three spots in J.D. Power’s closely watched annual study of new-car quality.

Genesis, Hyundai Motor Co.’s luxury line, ranked No. 1 with 68 problems reported per 100 vehicles, and Kia and Hyundai trailed closely behind. The trio have displaced longtime Japanese leaders Toyota and Honda. Both are below average in the 2018 Initial Quality Study, which is based on consumer surveys after 90 days of ownership.

“It starts from the top at Hyundai,” said Dave Sargent, vice president of global vehicle research for J.D. Power. “When they first conceive a vehicle, they are voracious consumers of customer input.”

Reliability has gotten better for most auto models in the U.S. market. The average number of problems per 100 vehicles fell by four compared with last year to 93. Many of the reported defects are design issues, especially with electronics. When consumers have a hard time getting the audio system to do what they want, it can’t be fixed with a trip to the dealer the way an oil leak can be.

“Mechanical problems are not as prevalent as they used to be,” Sargent said. “Infotainment is the highest problem area on a vehicle. Those design issues drive customers more crazy than breakdowns.”

Keeping it Simple

The Korean brands and Porsche rank highest in part because they’ve kept their electronics and infotainment systems simple and avoided the complexity that leads to software problems or confusion, Sargent said. Kia Motors Corp., which is 34 percent owned by Hyundai, had its namesake brand place second, with 72 problems per 100 vehicles. Hyundai moved up from sixth place last year to third with a score of 74, five fewer problems than Porsche.

On the other side of the study’s spectrum is Volvo. The Swedish brand owned by China’s Zhejiang Geely Holding Group Co. finished 29th out of 31 brands in the study, with complex infotainment system being the primary culprit for issues consumers experienced, Sargent said. Tata Motors Ltd.’s Jaguar and Land Rover had similar issues and ranked in the bottom two spots.

Germany’s BMW AG and Daimler AG’s main brands each have a lot of complex electronics, but more experience limiting issues with them. BMW and Mercedes-Benz finished slightly better than the industry average, with scores of 87 and 92, respectively.

Detroit Tops Japan

Toyota Motor Corp. and Honda Motor Co.’s namesake lines have fallen back because of complaints about electronics. Once stalwarts that were routinely toward the top of rankings, their cars still aren’t known for breakdowns. But both have had issues with new technologies, Sargent said. Toyota finished 17th and Honda finished 23rd.

The two Japanese brands have remained relatively stable in terms of the number of problems that their customers report, but other companies have moved ahead, including American car nameplates. The Ford brand finished fifth with a score of 81 problems per 100 cars, and Chevrolet was sixth with 82. Ram tied for eighth with 84.

The trouble for Detroit, Sargent said, is that Ford Motor Co., General Motors Co. and Fiat Chrysler Automobiles NV don’t get credit for their progress.

“If you ask the average person on the street, they will probably tell you that the Japanese have better quality,” Sargent said.

©2018 Bloomberg L.P.

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