The auto industry's five quality leaders as measured by last year's J.D. Power and Associates' Initial Quality Study held on to their rankings in the 2003 report, but four had more problems this year.
According to this year's survey, Toyota Motor Sales U.S.A. Inc., Porsche Cars North America Inc., BMW of North America Inc., American Honda Motor Co. and General Motors collectively have 616 problems per 100 vehicles, vs. 588 last year.
Only Porsche improved, to 117 problems per 100 vehicles from 122. And GM, No. 5, fell below the industry average defect rate of 133 with a score of 134, four points worse than a year ago.
The closely watched Initial Quality Study is based on surveys from more than 52,000 owners of 2003 model-year vehicles for problems encountered in the first 90 days.
The worse scores of the top five don't mean that consumers have become more discerning, says Todd Turner, president of Car Concepts Inc., an automotive consultancy in Thousand Oaks, Calif. Rather, the decline reflects some cutting of corners on quality, he says.
"The best manufacturers are having to cut costs," he says. "They are at a competitive disadvantage and it drives the best performers down."
The industry average remained 133 problems per 100 vehicles, meaning the below-average companies improved. In particular, the bottom five jumped 229 points total.
"The worst companies were driven up by technology improvements," Turner says. "And they get an advantage from the top producers in terms of parts suppliers. Suppliers that understand Toyota's standards also supply parts to Hyundai."
Kia Motors America Inc. again anchored this year's survey with a rate of 168 problems per 100 vehicles, although that was a sharp improvement over last year's score of 212. Mitsubishi Motors North America Inc., Subaru of America Inc., American Suzuki Motor Corp. and Hyundai Motor America were the survey's other basement dwellers.
This was the first time J.D. Power released below-average results for the quality study, although Automotive News has reported the complete results yearly.
Lexus continued to dominate the brand rankings, improving to 76 problems per 100 vehicles from 88 in 2002. Cadillac jumped to No. 2 with 103, up from sixth place last year with 116. Infiniti maintained third place with 110 problems per 100 vehicles, but the score was down from 107 last year.
Hummer debuted in last place with 225 problems per 100 vehicles, followed by Land Rover at 190, up from 192, and Kia at 168, up from 2002's last place showing with 212.
Toyota vehicles ranked highest in six segments, Ford in five and GM in three. American Honda and DaimlerChrysler each had one highest ranking among the 16 J.D. Power segments.