Japanese Cars Hold Power, but Domestics Gain in Study

By John O’Dell

July 9, 2003 12 AM PT

Times Staff Writer

Not so long ago, it could be downright embarrassing to drive an American car.

People who owned Fords heard the taunts that what the name really stood for was “Fix or Repair Daily.” Those offerings from Detroit, along with Chevrolets, Dodges and others, just didn’t age as well as imports.

Now the domestics are catching up.

Although Japan’s big three automakers captured top honors Tuesday in Westlake Village-based J.D. Power & Associates’ latest vehicle durability report, Ford Motor Co. and General Motors Corp. each had two brands that made the top 10. In fact, GM’s Buick came in third.

“The proof that domestics are doing better is in our warranty department,” said Bob Tuttle, managing partner of Tuttle-Click Automotive Group, whose dealerships in Orange County and Arizona sell domestic and Asian brands.

“Income from warranty repairs in our Chrysler and Ford stores is down about 50% from the heights in the 1990s. They definitely are building them better.”

Still, the Japanese ruled once again in the Power report.

For the ninth consecutive year, the Lexus luxury brand, imported by Toyota Motor Corp.’s Torrance-based U.S. sales arm, was deemed the most reliable. Infiniti from Nissan Motor Co., whose U.S. operations are in Gardena, finished second. Honda Motor Corp.’s Acura, imported by the company’s U.S. unit, also in Torrance, ranked fifth. The Toyota brand was sixth, and Honda was ninth.

What’s more, various Toyota and Lexus models were the highest ranked for reliability in nine out of 17 vehicle categories, ranging from compacts to full-size vans.

Power surveyed 55,000 car owners in the U.S. about 3-year-old vehicles. Results were compiled based on the number of complaints per 100 vehicles.

Lexus registered 163 complaints, for example, and Buick 193. South Korea’s Kia Motors Corp. -- whose U.S. headquarters is in Irvine -- had 509, putting it last. Next to last: Land Rover, with 441.

A few years ago, the Tuttle-Click Chrysler and Ford dealerships in Irvine used to buy used Toyotas and other import brands in the wholesale market and resell them to keep revenue up, said George Saad, general manager.

Now 75% to 80% of the dealerships’ used-car sales are Fords and Chryslers.

“We’ve really overcome the quality and reliability issue,” Saad said.

Having a reputation for durability can help keep prices high and reduce the need for carmakers to spend wildly on incentives. Despite their rising in the Power rankings, GM and Ford on Tuesday extended their hefty cash rebates and interest-free loans on most vehicles to spur sales. Last month, GM averaged $3,934 per vehicle in incentives, whereas Ford’s average was $3,492.

By comparison, Toyota, Honda and Nissan offer few incentives and low-interest loans, while continuing to nibble away at market share. And a new Honda, for instance, typically commands a $1,500 premium over comparable models from other manufacturers because consumers believe Hondas are so dependable.

A reputation for durability drives used-car sales and pricing. Again, Japanese automakers have the edge: Three-year-old Hondas fetch a premium of $1,800, said Joe Ivers, executive director of the quality and customer satisfaction practice at Power.

One quarter of new cars and trucks are leased, and most of them find their way to used-car lots in 30 months, said Paul Taylor, chief economist for the National Automobile Dealers Assn. And used-cars sales are where the big profits are, he noted: The net profit per new vehicle averaged $200 over the last three years whereas the average for used cars was $300.

Although the gap between Japanese and U.S. brands has narrowed in terms of customer satisfaction, Japanese companies continue to win in longer-term durability. In terms of complaints per 100 vehicles, Japanese brands rated 16% above the industry average in the Power report, whereas U.S. cars were 3% below, said Brian Walters, senior director of product research at Power.

In Tuesday’s report, Ford, GM and Chrysler collectively scored far better than European imports. Volvo, Volkswagen and Land Rover were in the bottom 10. “It’s a combination of the others getting better, and the Europeans either not improving or actually getting worse in some cases,” Walters said.

DaimlerChrysler’s Mercedes-Benz, for instance, was the top-rated brand in the first durability study in 1990, which examined 1985 models. This year, with Power looking at 2000 models, Mercedes tied for 26th place.

The big problem, analysts say, seems to be with the German carmaker’s Alabama-built sport utility vehicles and its lowest-price European-built C-Class cars.

“Mercedes shows how it takes a long time for perception to catch up with reality,” said Dan Gorrell, vice president of San Diego-based Strategic Vision, an automotive marketing research firm. “They are still regarded by most people in this country as a very high-quality brand.”

Meanwhile, domestic automakers have spent billions improving production processes and engineering.

But it takes years for those improvements to show up in the marketplace, noted Louise Goeser, vice president for quality at Ford. “We have outperformed the industry average in five of the past six years ... [and] we are much better than the public perception of Ford Motor Co. The way to keep improving the perception is to keep performing well.”

GM is hoping to change minds with a campaign in which the company admits to past quality problems and urges consumers to give GM another try.

Company insiders call it “the road to redemption” campaign.

In the Power report, GM had 12 finishers among the top-rated vehicles, second only to Toyota’s 13 top finishers.

To keep the momentum going, GM recently hired Toyota’s retired senior engineer, Tatsuhiko Yoshimura, as its director of durability and reliability strategy.

(BEGIN TEXT OF INFOBOX)

The best and the worst

Japanese brands still lead in durability, but domestic brands are moving up, according to a new study of owner complaints about 3-year-old cars and trucks. Here are the top- and bottom-ranked makes, based on problems per 100 vehicles. The industry average is 273 problems per 100 vehicles.

The best ...

*--* Rank Make Problems per 100 vehicles 1 Lexus 163

2 Infiniti 174

3 Buick 179

4 Porsche 193

5 Acura 196

6 Toyota 201

7 Cadillac 209

8 Lincoln 212

9 Honda 218

10 Mercury 240

*--*

... and the worst

*--* Rank Make Problems per 100 vehicles 28 Jeep 321

29 Volvo 330

30 Mitsubishi 339

31 Hyundai 342

32 Isuzu 368

33 Volkswagen 391

34 Suzuki 403

35 Daewoo 421

36 Land Rover 441

37 Kia 509

*--*

Source: J.D. Power & Associates

Los Angeles Times

The most reliable

Here are the top three vehicles for various types of 2000 model year cars and trucks, according to a J.D. Power survey. Toyota’s brands led the list with 13 entries, followed by General Motors’ with 12.

Top three vehicles, in order, in each segment

Cars

Compact: Toyota Corolla, Chevrolet Prizm, Honda Civic

Entry mid-size: Chevrolet Malibu, Plymouth Breeze, Chrysler Cirrus

Premium mid-size: Toyota Avalon, Toyota Camry/Solara, Buick Century

Full size: Mercury Grand Marquis, Buick LeSabre, Ford Crown Victoria

Entry luxury: Lexus ES300, Infiniti I30, Acura TL

Mid-range luxury: Acura RL, Lincoln Town Car, Buick Park Avenue

Premium luxury: Lexus LS 400, Infiniti Q45, BMW 7-Series

Sporty: Toyota MR2 Spyder, Acura Integra, Mazda Miata

Premium sports: Porsche 911, Honda S2000, Porsche Boxster

Trucks