Korean Automakers Race Ahead in Consumer Satisfaction Study

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April 28, 2004
Amazing though it may seem, Korean automakers outpaced both European and U.S. brands in initial quality, according to the J.D. Power and Associates 2004 Initial Quality Study.

Driven by Hyundai’s performance, the Koreans have aggressively cut initial quality problems by 57 percent in the past six years -— dropping from 272 problems per 100 vehicles in 1998 to just 117 in 2004.

It's a stark contrast to 1998, when Korean automakers trailed the industry-leading Europeans by an imposing 116 problems per 100. Koreans now lead the Europeans by and the domestics. They trail the Japanese by just 6 problems per 100 vehicles.

"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," said Joe Ivers of 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."

The study shows that widespread initial quality improvements have taken hold in the automotive industry, with initial quality problems dropping 11 percent from 2003. The industry average stands at 119 problems per 100 vehicles -- the fewest problems since the study was redesigned in 1998.

Among the 169 models included in both the 2003 and 2004 study, 129 (76%) have registered an improvement, while 35 (21%) have declined and five (3%) remain unchanged.

2004 Rankings

Toyota continues in the Initial Quality Survey's top spot, with seven models receiving awards, the most of any corporation. Toyota is followed by American Honda Motor Co. and Hyundai Motor America in a tie, and by BMW of North America. While General Motors, DaimlerChrysler and Ford continue to demonstrate product improvement, all three continue to rank below the industry average.

Lexus set a new record with its Lexus SC 430, which is the best-performing model in the survey's history, scoring just 44 problems per 100 vehicles. Lexus remains the top-ranked nameplate, despite a 14 percent decline in initial quality. It's followed in the nameplate rankings by Cadillac, Jaguar, Honda, and Buick and Mercury in a tie.

Thirty out of 37 nameplates have improved scores from 2003. Hyundai, which jumps an impressive 16 rank positions from 2003, makes the most significant advancement, improving 29 percent year-over-year to rank seventh. Between 1998 and 2004, Hyundai has improved by 62 percent -— more than any other nameplate and nearly twice the industry average of 32 percent.

Other nameplates reporting significant initial quality improvement in 2004 include: Honda (23%), HUMMER (23%), Land Rover (22%), Jaguar (20%) and Mercedes-Benz (20%).

J.D. Power and Associates bases its quality and satisfaction measurements on responses from millions of consumers annually.

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