Toyota Cruises, Hyundai Stalls

Move over, Hyundai. You had a nice run while it lasted, but it is time to yield the left-hand lane to Toyota (yet again).

Korean "comeback kid" Hyundai stunned the automaking world in May with its second-place finish to perpetual uber-automaker ToyotaMotors (NYSE: TM  ) , in J.D. Powers' survey of initial new-car quality. Moreover, Hyundai only lost out then because Toyota's Lexus division offset a just-under-perfect performance by its eponymous division. (By the way, Lexus also took top honors in this latest survey.)

Back in May, I noted that "The only real caveat to Hyundai's results lies in the nature of the report itself. The J.D. Power new-car survey only reviews problems that surface within the first 90 days of ownership of a new vehicle. Still, Hyundai's vaunted 10-year limited warranty, and the cost of honoring that pledge, give the company a big incentive to ensure that the autos it produces remain relatively problem-free for much longer than 90 days."

Sadly, "incentives" don't always work the way they should in the auto world. The J.D. Power report shows that Hyundai still has some work to do on the long-term quality front. Out of 16 car companies surveyed for the number of problems reported with their products over the course of the last year, Hyundai came in a lackluster 13th. Its score of 375 problems per 100 vehicles was nearly twice as bad as Toyota's 207 (or Honda's (NYSE: HMC  ) 210, for that matter.) Really, the only bragging rights Hyundai collected from this survey was the ability to say it is the best of the Korean automakers (talk about damning with faint praise.)

Meanwhile, aside from Toyota and Honda, the only other companies to beat the industry averages were Porsche, Motley Fool Stock Advisor pick BMW (BMW, traded on the Frankfurt Stock Exchange), and... wait for it... General Motors (NYSE: GM  ) . Yes, folks. It appears that Chevy quality really is once again "like a rock" -- at least over the long term. With only 262 problems per 100 vehicles, GM beat both the industry average of 269, and domestic rivals Ford (NYSE: F  ) and DaimlerChrysler (NYSE: DCX  ) -- not to mention my own personal favorite automaker, Nissan (Nasdaq: NSANY  ) .

Detroit, I take back what I said before about your city only being able to produce white rappers. Stick with making quality cars, try to keep the recalls under control, and in no time you can win back both percentage points of Hyundai's U.S. market share, to the great rejoicing of your shareholders.

Continue this discussion on Motley Fool's Buying and Maintaining a Car board.

Fool contributor Rich Smithowns no shares in any company mentioned in this article. He buys his trucks from GM and his commuter cars from Nissan.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 508862, ~/Articles/ArticleHandler.aspx, 10/21/2016 9:48:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,056.41 -105.94 -0.58%
S&P 500 2,132.04 -9.30 -0.43%
NASD 5,231.37 -10.47 -0.20%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/27/2010 2:42 PM
DCX.DL $9.70 Down +0.00 +0.00%
F $11.87 Down -0.10 -0.84%
Ford CAPS Rating: ****
GM $31.63 Down -0.12 -0.38%
General Motors CAPS Rating: ***
HMC $29.70 Up +0.03 +0.10%
Honda Motor CAPS Rating: ****
NSANY.DL2 $14.49 Down +0.00 +0.00%
Nissan Motor Co.,… CAPS Rating: **
TM $114.67 Down -1.47 -1.27%
Toyota Motor CAPS Rating: ***