The Quality Surprise

It wasn't too long ago that Korean-built vehicles were thought of as shoddy imitations of the Japanese.  After a series of big quality glitches in the early Nineties, Hyundai sales took a steeper plunge than a Magic Mountain roller coaster, and Kias were the butt of Jay Leno's jokes on The Tonight Show.  But this year's Initial Quality Study from California-based research firm J.D. Power and Associates indicates the worm is turning.  In this study, those once-derided Korean cars out-paced Domestic U.S. brands and, even more surprisingly, the aggregate of European brands.  And while the term "paradigm-shift" is perhaps the most-over-used term in the car industry, this turning of the quality tables is a landmark moment.  

Korean manufacturers, strongly driven by Hyundai's remarkable improvement, have aggressively cut initial quality problems by 57 percent in the past six years-dropping from 272 problems per 100 vehicles (PP100) in 1998 to just 117 PP100 in 2004. This is a dramatic improvement in the state of initial quality among the Korean-branded vehicles compared to 1998, when they trailed the industry-leading European-branded nameplates by an imposing 116 PP100. The Koreans now lead the Europeans by five PP100 and the Domestics by six PP100, and trail the Japanese by just six PP100.

"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 pace, but actually pass Domestics and other imports in terms of initial quality," says Joe Ivers, partner and executive director of quality/customer satisfaction at J.D. Power and Associates. "This demonstrates how vastly more competitive the market has become, which is good news for consumers, who will ultimately benefit."

Even as the Koreans were making historic improvements in quality, there were more widespread initial quality improvements in the automotive industry as well in 2004.  The study found initial quality problems dropping 11 percent from 2003. The industry average stands at 119 PP100-the fewest problems since the study was redesigned in 1998.

Although the Korean car makers have zipped past Domestic and Europeans when lumped together, there are still some American and European brands that out-point them in initial quality.  On a brand-by-brand basis, Cadillac, Buick and Mercury are U.S.-based brands that turned in better quality scores than Hyundai, even though the Korean carmaker did finish a surprising seventh in the overall brand rankings.  Jaguar was the lone European brand to outdo Hyundai in quality.  Meanwhile, the other Korean brand in the U.S. market - Kia - was well below the industry average.

A key takeaway from the 2004 IQS study is that it is no longer easy to single out high-quality cars by the national origin of their maker.  Several Japanese brands - including Subaru, Mitsubishi, Suzuki, Nissan, Mazda and Scion - scored well below the industry average of 119 problems per 100 vehicles in quality, while a number of domestic brands - including the above-mentioned Cadillac, Buick and Mercury plus Oldsmobile and Chevrolet were above industry average.

European brands were all over the board.  Mercedes-Benz, Audi, BMW and Volvo turned in above-average performances, but Saab, MINI, Land Rover, Porsche and Volkswagen were on the dreary side of the ledger. 

IQS measures a broad range of quality problems, heavily weighted toward defects and malfunctions, quality of workmanship, drivability, human factors in engineering (i.e. ease of use) and safety-related problems. The 2004 Initial Quality Study is based on responses from more than 51,000 purchasers and lessees of new 2004 model-year cars and trucks, who were surveyed after 90 days of ownership. This industry benchmark study for new-vehicle initial quality is now in its 18th year.

Driving Today Managing Editor Jack R. Nerad once served J.D. Power and Associates as Director of Publications.