Believe It or Not, GM Is Ranked No. 1 for Quality

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Did that title surprise you as much as it did me? I was actually caught off guard when I read J.D. Power and Associates' Initial Quality Study released today. Here's how the survey, in its 27th year, works. It measures the number of problems on the current year's vehicles reported after 90 days of ownership. It rates by brand, so while Porsche knocked off Lexus to take the top spot, General Motors  (NYSE: GM  )  was the top ranked corporation. Here are the details and what it could mean for investors and consumers.

Now, before I get into the results of each brand it's important to note that these measured problems in the report aren't manufacturing defects or recalls. Instead, nearly two-thirds of the issues consumers experience are design problems and quality shortfalls, according to J.D. Power and Associates.

General Motors headquarters. Photo credit: General Motors.

According to the report, Porsche ranks the highest in the study, with GMC and Lexus filling out the top three brands. Behind that was Infiniti and Chevrolet rounding out the top five rankings. It should be noted that GMC and Chevrolet were the only two non-luxury brands that broke into the top five.

"GM has the best quality of any corporation in the study, the first time it's been on top," said David Sargent, said the study's author told Automotive News. "And GMC and Chevrolet have never finished in the top five before."

If you break down the press release further, out of the 26 model segment awards, Chevrolet received five top spots with its Avalanche, Camaro, Impala, Silverado HD, and Tahoe. Honda, Kia, Mazda and Porsche each had two models taking home segment awards.

I follow the automotive industry for The Motley Fool, and from what I've seen over the last couple of years, Ford (NYSE: F  )  has topped GM in terms of product quality and consumer demand. The sales and market share increases back me up on that.

I very much respect J.D. Powers and Associates studies, and often find them great tools for inside information to the automotive industry. However, I think what we have to distinguish here is that Ford's SYNC and MyTouch infotainment systems have some work to do and those small frustrations drive its poor quality ranking in this survey.

In reality, though, while these give consumers small frustrations, Ford is still producing an overall vehicle that consumers love and are driving off the lots in droves. Fusion and Escape, for instance, have set numerous records in sales this year. Not to mention that Ford can't produce enough Fusions to keep them on dealer lots -- plant capacity has been running at 114% to try to keep up with demand. I think that's what the author hinted at below.

"Automakers are investing billions of dollars into designing and building vehicles and adding technologies that consumers desire and demand, but the risk is that the vehicle design, or the technology within the vehicle, in some cases may not meet customer needs," said David Sargent, vice president of global automotive at J.D. Power, in a press release.

Bottom line
When you look at the big picture, it's clear that Detroit's Big Three automakers have come a long way since the depths of the recession and their stereotype of producing poor-quality vehicles. Consider that for the first time in two decades all three Detroit automakers gained market share in the U.S. for the entire first quarter. In addition to that, Ford has produced America's best-selling vehicle for the last 31 straight years, and owns four of the top 12 best-selling models -- more than any other automaker.

We also have to remember that Ford consistently ranks on top in consumer loyalty and that doesn't happen by chance. I think it's time we give GM a nod in respect for improving vehicle quality -- GMC jumped 10 spots to rank second in this year's study -- but in my opinion, Ford is still on top of Detroit's Big Three automakers. One thing is for sure: If Ford and GM continue to impress consumers with quality, popular designs, and valuable vehicles, investors will surely be rewarded as automotive sales continue to surge.

Ford and GM are the fiercest of rivals, but which one is best positioned to outgrow the other in coming years? A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market," names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free -- just click here for instant access.

Read/Post Comments (7) | Recommend This Article (4)

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  • Report this Comment On June 20, 2013, at 7:10 AM, Cody700 wrote:

    The problems reported are more of a technical nature than mechanical nature. I liken this to millions of people that had their VCR's flashing 12:00 for the entire time that they owned them because they didn't know how to set the time. This is basically what we are talking about here. Cars and technology are eons ahead of the consumers that are purchasing them. That is a fact.

  • Report this Comment On June 20, 2013, at 9:02 AM, AcuraT wrote:

    While it is great that GM did so well, we also have to remember that of those five Chevy cars that did so exceptionally well, four of them are discontinued or redesigned now (all but the Camaro - Avalanche (discontinued), Impala (redesigned), Silverado HD (redesigned), and Tahoe (redesigned). What is of concern is that all of those cars now have the touch screen interface of Intellink. With this new measurement of JD Power with the very subjective rating of what people "feel" on how their cars work and their interface, the ratings are going to start swinging wildly year to year as car companies and brands tinker with the digital interface. It will be very interesting to see how the JD Power ratings morph in the future as the technology changes all manufactuers are doing impact their future ratings.

  • Report this Comment On June 20, 2013, at 9:55 AM, TMFTwoCoins wrote:


    I'm in total agreement. Great point.

  • Report this Comment On June 20, 2013, at 10:35 AM, NineD930thTA wrote:

    The reason Ford didnt crack the top 5 is because the people that were duped into buying or leasing a Ford have woken up to realize they got screwed by inferior crap.

    To say Ford is beter than GM in quality is a gross overstatement of epic proportions.

    The F series have been the best selling for 31 years because GM has 2 truck brands. Add the Silverado and Sierra together and GM frequently outsells Ford. Add the Equinox and Terrain together and they outsell the Escape which is a total crap box pile of junk.

    The only thing helping the Fusion is it looks like an Aston Martin. I cannot believe how many Americans think they are helping the US out by getting those which are MEXICAN BUILT! And you cannot convince me anything put together in Mexico is better than something put together in the US or Canada. The long term quality of the Fusion will be mediocre at best.

    Just because you have 4 of the 10 best selling vehicles doesnt mean your long term quality is there. Ford is still getting sales of people that wont buy GM because the government bought the stock. Eventually those consumers will forget because they are Americans and Americans have short memories.

    And in case you missed Fords sales numbers last month 33% of their sales were Fleet sales which GM was at 23% and GM still outsold Ford. The numbers don't lie but you have to be smart and be able to dig into the numbers. Chrysler sales are up but they are selling to rental fleets. Big deal. GMs sales increases have been to retail customers.

  • Report this Comment On June 20, 2013, at 10:36 AM, NineD930thTA wrote:

    Acura T I sell Buicks and GMCs and the intellilink is soo easy to use and operate it wont affect GMs quality ratings in a negative way. Its the easiest user friendly touch screen system available. As long as us salespeople show the customer how easy it is to use GMs numbers will just keep going up and up and up.

  • Report this Comment On June 20, 2013, at 10:48 AM, TMFTwoCoins wrote:


    I'd take your comments more serious if they were less biased.

    To your comment on fleet sales, shh. GM was actually 26% fleet sales compared to Ford's 32% through May. That equates to a 34,000 difference. So be quiet, pot calling kettle black there.

    I wrote a huge article on the "Truth About American Made vehicles" and GM is just as universally put together as anybody. Though, the premise was to dispute that Japanese vehicles were more American made, which again is false.

    Yes, when combined the Sierra and Silverado have still failed to out sell the F-Series over the last three years, and it isn't getting better for them. We'll see how the 2014 redesigns help GM.

    I don't think saying Ford is better in quality than GM to be a overstatement by any account. It's why Ford consistently tops GM in consumer retention and loyalty. It's why market share has increased in comparison.

    Now, I'll say that my perception can change quickly as GM will be refreshing the oldest vehicle lineup in the industry and that could drastically help its quality -- we'll see.

  • Report this Comment On June 21, 2013, at 9:09 AM, TMFMarlowe wrote:

    Nicely said, Daniel. One key takeaway here -- for both Ford and GM fans -- is that GM is (at least in North America) on much the same path that Ford followed, but a few years behind. Two years from today, GM's North American business is going to look a lot different than it does today. On recent evidence, the smart bet is that it will look a lot better -- and GM's bottom line a lot fatter -- as long as the US economy doesn't dip back into recession.

    (And meanwhile, Ford's global profits will also be getting fatter, as the big moves they're now making in Europe and Asia start to pay off.)

    John Rosevear

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