Auto Reliability Ratings Shake Things Up for European Brands

Japan still rules top 10, Ford stalls over electronics glitches

   
Auto Reliability Ratings Shake Things Up for European Brands

At first glance, the overarching message from Consumer Reports’ just-released annual auto reliability ratings appears to be “Buy Japanese.” That’s hardly a shock, given the dominance that Japanese automakers like Toyota (TM), Honda (HMC) and Nissan (NSANY) have exhibited in recent years.

But that’s only part of the story. Although Japan still accounted for seven of the top 10 brands, Volkswagen’s (VLKAY) Audi, Sweden’s Volvo and General Motors’ (GM) GMC division pulled into fourth, seventh and ninth places, respectively.

The Results

Toyota’s luxury Lexus brand won top honors in CR’s Most Reliable Brands survey, with the Toyota brand as the runner-up and Honda’s upscale Acura brand rounding out the top three. Audi zipped into fourth place, followed by Mazda, Nissan’s luxury Infiniti, Volvo, Honda, GMC and Subaru.

Now to the bottom of the pack: In 28th place, the worst-ranked brand was BMW’s MINI (as in Mini Cooper), followed by Ford’s (F) luxury Lincoln brand, Ford, GM’s Cadillac, and Fiat’s (FIATY) Dodge and Jeep brands. Finishing out the Bottom 10 are Nissan, Hyundai, Volkswagen and Chrysler’s Ram truck line.

The rankings are based on Consumer Reports’ survey of subscribers about their experiences with 1.1 million current or prior-year vehicles. The magazine used data gleaned from the survey to predict the reliability of 2014 models.

The magazine also dropped its recommendations for three top-selling Toyota models — the Camry, RAV4 and Prius V — because they failed an independent crash test. Audi’s A4 lost its “recommended” rating for the same reason.

GM came out of the survey in better shape than its Detroit 3 rivals — Buick raced into 12th place, up from 21st last year, while the Camaro and Cruze were the only Chevy models to post below-average reliability scores.

Ford and Chrysler brands performed less favorably. Ford’s F-150 pickup with the 3.7-liter V6 was the only one of the more than 30 Ford models reviewed to score above average in the survey; more than 20 models scored below average.

Ford ranked 63 percent worse than the overall industry average — and the new Ford C-Max Energi plug-in hybrid received the lowest reliability score of any model CR surveyed. Several EcoBoost turbocharged V6 models received poor reliability scores as well. That’s a particularly unwelcome indictment given Ford’s strong sales and stock performance lately.

Although Chrysler continues to improve — and its full-size 300 C sedan has picked up speed — strong contenders like the Jeep Compass and Patriot SUVs scored below average in reliability, as did the V6 Jeep Grand Cherokee.

In today’s hyper-connected world where in-car technology is redefining the driving experience, it’s a little ironic that consumers’ biggest complaints come from that same technology: In-car electronics generated more complaints from owners of 2013 models than any of the other 16 categories.

When consumers began to suggest that problems with electronics were underreported, Consumer Reports sent a “re-contact” survey to about 10,000 subscribers to get more specifics, according to WardsAuto.

CR’s auto testing director Jake Fisher believes that the glitches may be underreported because older buyers are less likely to sync a smartphone to their cars or update Facebook statuses using the in-car system. Honda and Cadillac also suffered in the survey from buggy electronics, while Fisher chalked up Chrysler’s better performance in that area to its relationship with GPS leader Garmin (GRMN).

Bottom Line

There are three important takeaways from Consumer Report’s latest reliability survey. First, Japanese brands no longer have a stranglehold on reliability. The fact that crash-test results bounced three popular models from CR’s recommendations means TM’s rivals are looking at a window of opportunity.

Second, European brands are vying for a piece of the action. Gains from Audi and Volvo need to be evaluated — and countered — by the Detroit 3 before they get dinged in market share.

Third, automakers in general — and Ford in particular — must work out the infotainment glitches fast or risk turning off younger buyers, who already are less thrilled about purchasing high-ticket depreciating assets.

As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/10/consumer-reports-auto-reliability-shakes-things/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.