Costa Mesa-based market research firm J.D. Power recently released its annual Initial Quality Study—one of the most closely watched reports in the auto industry—and this year’s results gave a perfect shine to Fountain Valley-based automaker Hyundai Motors North America.
Its luxury brand, Genesis, took home the gold, ranking tops on the list, while affiliate Kia Motors North America in Cypress placed second and Hyundai third. It’s the first time three Korean brands held the top three spots since the vehicle quality report first published in 1987. Porsche AG and Ford Motor Co. ranked fourth and fifth.
Hyundai Director of Quality and Service Engineering Omar Rivera said it’s rewarding to receive the recognition but that the carmaker still faces challenges.
“What we saw this year did not happen overnight,” he said. “It’s been years in the making. But the challenge is not over—never is. We want to make sure that the product consistently satisfies the customer.”
J.D. Power’s study serves as a report card for automakers and consumers by measuring the number of issues experienced in a new vehicle within the first 90 days of ownership.
Michelle Krebs, executive analyst at Autotrader.com Inc., said it found that “quality and dependability are consistently at the top of every car shopper’s must-have list.”
“For consumers who take the time to research their purchases—and most do—a good rating by J.D. Power is important [and] a bad rating can be a deal breaker. While there are numerous rating agencies, J.D. Power is among the most well-known and influential. A strong rating by J.D. Power in initial quality or consumer satisfaction can greatly benefit a brand.”
The auto-focused analytics firm moved its headquarters from Westlake Village to Costa Mesa in 2015 and named Dave Habiger chief executive in March.
Genesis, Kia and Hyundai clinching the rankings for best overall initial quality comes as the automakers charge ahead with a plan to reorganize U.S. operations to revive flagging sales. Their collective U.S. market share touched an eight-year low of 7.5% last year.
One division that could help turn the tide is quality control. Hyundai’s working to revamp its product quality management system, software that helps manage and analyze data on vehicles and their issues.
Rivera said his department analyzes every aspect of a vehicle, “from cradle to grave,” to ensure glitches are quickly and properly fixed, while future designs cater to customer requests.
“We’re the voice of the customer,” he said. “We’re the ones who collect all the information of what the customer likes and may dislike, what happens in the field and in the development process, and we report that information to Korea or the responsible teams to improve those products [and] deploy counter measures to contain [any issues].”
Solid Footing
J.D. Power said its survey is based on responses of more than 75,000 buyers and lessees of new 2018 vehicles from February through May of this year. It looks at a vehicle’s exterior and interior, and safety and performance in eight rated categories.
The study also ranks car, truck and SUV models of domestic and international automakers. Hyundai Motor Group models that won their segments based on size are Kia’s Rio and Sorento, Hyundai’s Tucson, and Genesis G90.
Other OC automakers received plaudits. Irvine-based Mazda Motor of America Inc. was cited as the most-improved brand over last year. Mitsubishi Motors North America Inc. in Cypress was also found to have improved its vehicles but ranked in the bottom five out of the 31 rated brands, U.K.-based Land Rover ranking the worst.
Overall, the study showed new-vehicle quality improved for the fourth consecutive year, up 4% from last year.
J.D. Power Vice President of Global Automotive Dave Sargent said automakers are listening to consumers but warned that some buyers are still finding problems.
“As vehicles become more complex and automated, it’s critical that consumers have complete confidence in automakers’ ability to deliver fault-free vehicles,” he said in a statement.
Rivera said Hyundai has gotten more efficient at spotting red flags in its vehicles, thanks to technology advances. It can be alerted of problems the same day—a big shift from about seven years ago, when it would typically take about a month to be notified of any problems with a vehicle’s design or performance.
That’s because many of its cars now have Blue Link technology, Hyundai’s cloud-based connected car platform that launched in 2011. Similar to technology used by other manufacturers, including General Motors subsidiary OnStar, the service offers vehicle health reports, maintenance alerts and roadside assistance to the consumer but also reports diagnostic information directly to Hyundai—sometimes before a customer purchases the vehicle.
Rivera recalled a situation when vehicles that had just arrived from South Korea to the U.S. began reporting a diagnostic trouble code.
“As soon as the car got off the boat, we got a notification of this particular concern,” he said. “We had a team that audits cars at the port, so they were immediately able to get to the vehicles, diagnose the vehicles … and we were able to fix the cars before we shipped them to the dealers.”
Rivera said Hyundai’s long-term plan is to install Blue Link technology in all of its cars. Nearly half get the software now.
Until then, it wants to use data it receives from connected cars to help inform audit practices on nonconnected vehicles in order to create efficiencies, not just for its engineers but also for the departments it provides reports to, such as manufacturing, design, and research and development.
“Our focus is to get ahead of the issue as much as possible—let’s contain it before it gets to the dealer,” Rivera said, explaining that the idea is to save the customer time.
“It’s also being able to prediagnose the vehicles before they show up at the dealer for service. If you know why they’re coming in, you can check if [the dealer] has the right part, the right technician with the right training before they get to the dealer.”
