Summer is here again -- according to the thermometer, if not yet the calendar -- and with it, J.D. Power and Associates' latest report on who's hot, and who's not, in the car world.

Twice a year, the McGraw-Hill (NYSE:MHP) unit publishes reports on vehicle quality. In the summer, J.D. Power kicks the tires on new cars and rates their makers for "initial quality." A few months later, the research house looks under the hood of used cars and assigns grades for "dependability." The 2007 edition of the quality survey came out last week, and the results are, if not entirely surprising, still worth perusing if you're pondering an investment in this sector.

The party line
Reviewing the stats, we see that J.D. Power highlighted significant improvements that Ford (NYSE:F) made in the rankings. Ford's "five top model segment awards" were, J.D. Power says, "more than any other automobile corporation this year." Furthermore, 14 Ford models "place in the top three of their respective segments -- an achievement unmatched by any other corporation this year."

So that's the theme of J.D. Power's take on the news. But here at the Fool, we like to think independently. So having let the study's authors have their say, let's review the results from a Foolish perspective.

The Big Three
First off, kudos to J.D. Power for identifying Ford's turnaround. I'd also point out that Ford managed to lift all three of its key brands by beating (in a good way) the industry average of 118 "problems" per 100 vehicles produced. In each of the past two years, only Ford's Lincoln brand had managed this feat, but the 2007 model year saw Ford, Lincoln, and Mercury all with their heads above water, along with perpetual standout Jaguar. Meanwhile, Ford's Land Rover brand assumed its customary position of dead last in the survey.

Mirroring Ford's achievements, the surprise success story of the survey has to be Teutonic-American amalgamation DaimlerChrysler (NYSE:DCX) -- or rather, the German half of that equation. Mercedes-Benz turned on a dime this year, rocketing all the way from 25th place to fifth in 12 months' time, and beating out even its own sixth-place showing from the 2005 survey. In contrast, the survey showed the wisdom of Daimler's decision to cut loose Chrysler. The American car division's namesake models fell from 11th place last year to assume Mercedes-Benz's old lukewarm title of "25th best." With 151 problems per hundred Chryslers produced, the automaker's quality was about 21% worse than the average. Meanwhile, Chrysler's Dodge and Jeep brands gave Land Rover a run for its money in the competition for the title of worst cars in the world.

Rounding out the Detroit Big Three, General Motors (NYSE:GM) delivered a poor performance. In contrast with last year, not a single GM brand rose above the average. Chevy, Buick, GMC, Pontiac, Saturn, Saab, Hummer -- the entire laundry list of GM brands fell short of the 50th percentile this year. Perhaps if management spends less time fending off gruff but well-meaning takeover artists and more time building quality cars, it can do better next year.

The other Big Three
Over on the other side of the globe, though, GM's Rick Wagoner can still point to Nissan's (NASDAQ:NSANY) lackluster showing in the rankings as proof that he was right to rebuff the gruff Kirk Kerkorian. Although its luxury-car division, Infiniti, turned in a respectable ninth-place showing, Nissan proper fell six rungs from last year's above-average showing, to a sub-par 19th place this year. I guess merger negotiations are distracting for all parties involved.

In a reversal of Nissan's trends, fellow countryman Honda (NYSE:HMC) improved its base models' showing, as the namesake brand climbed two rungs to fourth place in this year's survey. Meanwhile, its supposed "luxury" brand, Acura, dropped to a below-average 17th place.

And for the second year in a row, the vaunted Toyota (NYSE:TM) failed to claim the top spot in initial quality for its luxury brand. Just like last year, Lexus ceded that honor to Germany's Porsche. Even worse, the firm's namesake Toyota brand -- synonymous with quality in American car-buyers' minds, but perhaps not for long -- slid three slots to seventh place, ending up back where it was in 2005. About the only good news at Toyota is that its still wet-behind-the-ears Scion brand got enough kinks worked out to emerge above the average this year.

Everyone else
Foolish subscribers to Motley Fool Stock Advisor will be pleased to learn that David Gardner's May 2004 pick, BMW (OTC BB: BAMXF.PK), isn't just continuing to pull ahead of the S&P 500 -- it's up 50% since being recommended, or 17% better than the index. It's back on the quality track as well. After falling sharply in the rankings last year, BMW ascended six rungs to take 21st place in J.D. Power's survey.

Finally, the least lauded but perhaps most significant news of all concerns the hero of J.D. Power's 2004 initial quality report, Hyundai (OTC BB: HYMLF.PK) -- or, rather, its supposedly rinky-dink Kia affiliate. For the first time ever, Kia joined big brother Hyundai in the top half of the rankings this year. Granted, at 12th and 13th places, respectively, Hyundai and Kia hold that honor by the skin of their teeth, but props are deserved, and props shall be given. All hail, Hyundai.

I don't know about you, but while J.D. Power and the rest of the Car & Driver set focus (pun intended) on Ford's turnaround and praise Daimler for its decision to cut Chrysler loose, this Fool is going to start looking into the best way to pick up some shares of Hyundai. Given the increasing numbers of its cars I see on the road these days, the continuing quality improvements that should put even more of them on the road, and the fact that the stock is trading for 24% off of its highs of early 2006, this stock is starting to look mighty interesting.

Psst! Don't tell Rich, but the globetrotting investors at Motley Fool Global Gains have the system for investing in foreign stocks all figured out already. Grab yourself one of our free trial offers for the service, and find out how it's done.

Fool contributor Rich Smith does not yet own shares of any company named above. The Motley Fool's disclosure policy requires him to tell you that, but it doesn't say he has to tell you he drives a battered old Chevy S-10. (Oops.)