Thursday, June 08, 2006
J.D. POWER SURVEY: Hyundai Ranks As #1 Non-Premium Brand
BY SARAH A. WEBSTER Detroit Free Press June 8, 2006
Maybe Hyundai Motor Co. drivers don't need that 10-year, 100,000-mile warranty after all.
The South Korean automaker known for its value pricing -- all its vehicles sell for less than $29,000 -- delivered a jaw-dropping performance in J.D. Power and Associates' annual survey on new-vehicle quality, which was released Wednesday.
Hyundai was the No. 1 non-premium brand in the United States, edging past Toyota, the Japanese brand whose rock-solid quality reputation has been shaking Detroit's dominance in the nation's auto market for years.
Overall, Hyundai was No. 3 in this year's report, behind No. 1 Porsche and No. 2 Lexus, Toyota's luxury brand, and right ahead of Toyota. Last year, Hyundai was No. 11, so the leap made Hyundai the third-most improved nameplate this year.
"We're very proud and very excited," said Don Dees, vice president of service for Hyundai Motor America, the subsidiary of Hyundai that sells and distributes new cars and trucks in the United States. "Our objective is to move up and become No. 1 in everything we do."
Even Toyota Motor Corp., whose products topped 11 of the 19 categories, acknowledged the growing pressure from Hyundai. New Hyundai drivers reported 102 problems per 100 vehicles, compared with the 106 problems reported by new Toyota brand owners.
"There's no question that Hyundai is coming on strong and doing a tremendous job," Jim Lentz, Toyota group vice president and general manager, said in a conference call with journalists. "They are going to become a bigger and bigger player in the marketplace."
Quality is always a top concern for new car and truck buyers. So the top-notch quality performance likely will give a boost to Hyundai sales, which are already up 4.5% this year, and help the automaker achieve its growth targets.
Hyundai -- which has a North American headquarters in Fountain Valley, Calif., a new $1.1-billion plant in Alabama and an engineering and technology center in Superior Township -- is aiming for 500,000 U.S. sales this year and 1 million annual sales by 2010.
The company will certainly have a lot of selling points from this year's J.D. Power report:
Five of the seven 2006 models that Hyundai sold ranked in the top three for their category.
The Hyundai Tucson was the No. 1 compact multi-activity vehicle. Three Hyundai cars took second-place spots: the Elantra compact car, the Tiburon sporty car and the Azera large car.
Hyundai's most popular vehicle, the Sonata, ranked third in the highly competitive midsize car segment.
Only the company's Santa Fe SUV, which is being redesigned for the 2007 model year, and the Accent subcompact car did not make the top three slots in their respective categories.
What's more, two of the top-performing vehicles, the Sonata and Azera, were brand new in 2006, making the performance more spectacular. Automakers usually take a quality hit the year they launch a product because it usually takes time to work out all the new-vehicle glitches.
"That is probably the thing I'm most proud of, because that bucks the normal industry trend," said Dees, whose career has included stints with Toyota and Chrysler. "We're launching great, great products."
Hyundai's assembly plant in Alabama, which builds the Sonata and Santa Fe, finished 10th in plant quality out of 73 plants in North and South America. That made the plant among the best plant introductions in the last decade. The facility has capacity to build 300,000 vehicles a year.
Dees said there's no secret to Hyundai's performance.
"The success of that is planning, preparation and great training," he said. "You had a brand new plant, a brand new product ... a brand new workforce, and to come out of the gates ranked 10th out of 73 plants is outstanding."