RATING CAR RELIABILITY : DETROIT MOVES UP BUT ASIA RULES / THE WALL STREET JOURNAL EYES ON THE ROAD ( HIGHLY RECOMMENDED READING )

EYES ON THE ROAD

OCTOBER 27, 2010.

Rating Car Reliability: Detroit Moves Up but Asia Rules

By JOSEPH B. WHITE

People buy cars for all sorts of reasons—exciting styling, cutting-edge safety technology, a prestigious brand. But a reputation for reliability is important to just about every consumer.


That is why the latest Consumer Reports survey of new-car reliability, released Tuesday, should be a caution to the three Detroit auto giants and some of the big names among European luxury-car makers. Many of the most reliable brands continued to belong to Asian car makers, including Toyota Motor Corp. and Honda Motor Co.


Consumer Reports said it received data on 1.3 million vehicles from subscribers and through its website. Based in part on a vehicle's reliability history over the three most recent model years, the report predicted how well the 2011 model will hold up.


It's not all bad news for Detroit: Ford Motor Co. and General Motors Co. have greatly improved the reliability of their vehicles from the dark days of the 1980s and 1990s, and in certain segments are equal to or superior to the Asian competition, the Consumer Reports survey said.


GM's newest models, such as the Chevrolet Equinox crossover wagon and Buick LaCrosse sedan are predicted to have good reliability for 2011, and some of GM's least reliable models that dragged down scores in the past have been sent to the big scrap yard in the sky.


Ford's mid-size, front-wheel-drive Fusion sedan is now the top-ranked model in Consumer Reports' "family cars" segment—better than the Toyota Camry, the Honda Accord, the Nissan Altima and the Hyundai Sonata. Overall, Ford is now No. 1 among the Detroit brands.


Good quality propels a virtuous circle in auto-industry performance. The more reliable a company's cars, the more people are willing to pay for them, which makes it easier to sell without enormous discounts and yields more money to build better cars. Ford said Tuesday it earned $1.7 billion in the latest quarter. Higher prices added $400 million to that bottom line, before taxes.


But for all that improvement, Ford came in No.10 among the 27 brands ranked by Consumer Reports. The highest-ranked GM brand was Chevrolet, at No. 17. Prospective investors in GM's forthcoming initial public offering of stock must hope that the company can move faster to break free of the ill will created by years of mediocre models.


"It doesn't take very long to lose a good reputation, but it takes five or 10 years to gain one," said David Champion, senior director of Consumer Reports auto-test operations. "GM is already on that cycle and will start building that up."


For Chrysler Group LLC, the journey has yet to start. The Chrysler brand came in last in the Consumer Reports ranking—still awaiting a promised product renaissance enabled by its new partner, Fiat SpA.


What about Toyota, which last year suffered an unprecedented barrage of recalls and reputation-damaging revelations about its corporate culture?


The company's reputation did get dented. The Prius hybrid, once highly ranked, fell to "average" because of brake problems that led to a big recall.


Still, Toyota Motor's Scion small-car brand was No. 1 overall in the survey. The mass-market Toyota brand ranked No. 6. Lexus came in at No. 9. Many of the Toyota, Scion and Lexus owners who responded to Consumer Reports's questionnaires still like their cars and trucks.


Honda Motor and its Acura luxury brand kept chugging along, with respondents ranking Honda or Acura models tops in five different segments, including luxury SUVs (Acura MDX), small SUVs (Honda CR-V), and luxury cars (Acura RL).


Korea's Hyundai Motor Co. showed again that it has to be reckoned with. Ranked No. 12 overall, the company launched six new models this year that had average or better-than-average reliability, according to Consumer Reports.


The survey rendered its toughest judgments on some of the most prestigious brands in the business, Mercedes-Benz, Audi, BMW and Jaguar.


The sophisticated technology that sets luxury cars apart from humdrum, mass-market vehicles comes with a high degree of risk. A troublesome supercharged engine helped to sink ratings for the Audi A6, Consumer Reports said. Mercedes suffered in part because its compact GLK sport utility ranked last among vehicles in its segment. "I don't think the Europeans are as concerned as they should be about reliability in the U.S.," Mr. Champion said.


BMW, ranked 23 out of 27 in the Consumer Reports survey, Tuesday underscored the challenges luxury-car makers confront as they use advanced technology to produce vehicles that can go fast while burning less fuel and polluting less. The German auto maker said it's recalling more than 150,000 vehicles built between 2007 and 2010 in two separate actions to fix faulty fuel pumps.


The recall underlined what many customers already knew. A big reason for BMW's low marks in the Consumer Reports survey was "high problem rates related to the fuel system."


—Mike Ramsey contributed to this article.


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