GM Brands Score Rank Highest for Durability in 25 Years

General Motors Co. (GM)’s brands all scored average or better for the first time since J.D. Power & Associates started studying the dependability of three-year-old vehicles 25 years ago. Industrywide quality had its first drop since 1998.

Toyota Motor Corp. (7203)’s namesake line, Volkswagen AG (VOW)’s Porsche and Ford Motor Co. (F)’s Lincoln all scored worse, falling from the top five and contributing to a 6 percent increase in complaints, Westlake Village, California-based J.D. Power said in an e-mailed statement. Toyota’s Lexus remained the top brand for a third straight year.

Improvements by GM’s Cadillac and Buick in the 2011 model year vaulted those brands into the top five in J.D. Power & Associates’ annual Vehicle Dependability Study released today. The largest U.S. automaker also won an industry-best eight categories for Chief Executive Officer Mary Barra, who took over as product chief in February 2011.

GM has “put in a massive amount of hard work” into improving its quality as it fights to counter past problems, David Sargent, vice president of global automotive research at J.D. Power, said in a telephone interview. “A lot of people still feel that GM vehicles are not especially reliable, a lot of that is based on maybe what they owned 15 years ago,” he said. “It’s the biggest issue that they face, this lagging perception.”

GM’s Gains

Dependability gains for GM follow the Detroit-based automaker leading another closely watched quality measure last year, J.D. Power’s Initial Quality Study, for the first time in almost three decades. The rankings help make the case that the automaker is building some of its best vehicles in a generation.

GM gained 0.9 percent to $35.56 today. The shares have slid 13 percent this year, while the Standard & Poor’s 500 Index slipped 1.6 percent.

Creating customer loyalty hinges on the reliability of their vehicles, J.D. Power said. Fifty-six percent of owners who experience no problems with their vehicle stick with the same brand on their next purchase, the researcher said. Forty-two percent remain loyal if they report three or more problems.

The industry’s increase in issues per 100 largely came from engine and transmission problems, J.D. Power said. Small gasoline and diesel engines were more problematic than five- and six-cylinder engines, the study said.

Engines, Transmissions

“A lot of the problems we see increasing are not necessarily true issues of dependability, i.e., vehicles going wrong over their life, but they’re things which have been designed in a way that the customer didn’t like on Day 1 and three years later they still don’t like,” Sargent said.

Those issues include engine hesitation, rough transmission shifts, a lack of power in vehicles and hands-free communication not working correctly, he said.

“When we look at what we would consider pure dependability issues, those are tending to improve,” he said. “Things like brakes.”

Toyota’s Lexus led the industry for the third straight year with 68 problems per 100 vehicles while Daimler AG’s Mercedes-Benz brand rose to No. 2 from No. 5 last year with 104. Cadillac’s 107 points elevated it to No. 3 from below average last year, while Buick increased to No. 5 from No. 6 with a score of 112. Honda Motor Co.’s Acura luxury brand rose to No. 4 from No. 8 with a score of 109.

This is the first time in the study’s 25-year history that all of GM’s brands ranked at or above the industry average, Sargent said.

GM’s dependability is improving but not yet as good as the best in the industry, he said. “Partly it’s around consistency of execution,” Sargent said. “GM is extremely good at fixing problems once they know about them and what they’re working really hard on now is not having those problems occur in the first place.”

Mini Cooper

When it came to specific models, GM, Toyota and Honda dominated the segment awards. Bayerische Motoren Werke AG (BMW)’s Mini Cooper, the only above-average compact sporty car, was the lone category winner not made by GM, Toyota or Honda. Last year, Ford, Audi, Hyundai Motor Co., Mazda Motor Corp. and Nissan Motor Co. all had a vehicle win in a model segment.

Eight of GM’s models, including the Chevrolet Volt plug-in hybrid sedan, Buick Lucerne and GMC Sierra pickup, topped their segments. Toyota followed GM with seven models, including the Toyota Camry mid-size car and Lexus RX sports-utility vehicle, while Honda won in six segments, including with its Honda CR-V SUV.

Ford’s Lincoln, which had tied the Toyota brand last year for third, again tied the Japanese automaker’s namesake brand along with Honda as all three landed at sixth with scores of 114. The Ford brand remained below average with its score worsening to 140.

Porsche, Ram

VW’s Porsche fell to No. 7 from No. 2 as its average number of problems increased to 125 from 94. VW’s namesake brand remained below average even as its average score improved to 158 from 174.

Chrysler Group LLC’s Ram truck brand saw its problems per 100 increase by 43, the most in the study. It fell to 25th with 165 problems per hundred, one year after it was the most-improved brand and soared to No. 9, J.D. Power said.

This time around, Land Rover was most improved with its score decreasing to 179 from an industry-worst of 220. BMW’s Mini brand, at 185, was in last place this year, despite Cooper’s segment win.

The industry’s average of 133 problems per 100 vehicles from 2011 model year vehicles compares with 126 in last year’s study and 132 the year before that.

To contact the reporter on this story: Tim Higgins in Southfield, Michigan, at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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