By John D. Stoll
Fiat Chrysler Automobile NV brands were ranked at the bottom of
an influential quality survey released Wednesday, the latest sign
that the Italian-U.S. auto maker is struggling to keep up with
mainstream rivals at home and abroad.
J.D. Power, owned by McGraw Hill, released its 2015 Initial
Quality Study, saying brands that historically were seen as quality
laggards have gained considerable ground. South Korea's affiliated
auto makers Kia Motors Corp. and Hyundai Motors Inc., once
occupying the industry's bottom rung, are now the best mass-market
brands. General Motors and Ford Motor Co., meanwhile, have caught
up with Japanese auto makers that once solidly outpaced
Detroit.
Three FCA brands--Chrysler, Jeep and Fiat--were among the bottom
five in IQS, with J.D. Power blaming a range of "defect
malfunctions." The firm's initial quality expert, Renee Stephens
said Chrysler's relatively new 200 sedan, for instance, has a
nine-speed transmission that attracted several complaints, and many
FCA products suffer from routine problems that could be addressed
at before leaving the assembly plant, including unsatisfactory
paint jobs or the way parts fit together.
The study, performed earlier this year, asked 84,000 new vehicle
buyers to report things gone wrong over the first three months of
ownership. There are more than 200 potential defects on J.D.
Power's list (including a range of technology glitches), and the
average score for a brand in 2015 was 112 defects per 100 vehicles,
an improvement over 2014. While not the only industry quality
study, the IQS has long been considered the most influential
because of the role it plays as an influence when many car shoppers
are looking to buy.
Fiat, Chrysler and Jeep all scored above 140 problems per 100,
sharply higher than the 86 reported for Kia and 95 for Hyundai.
Most mainstream brands, including Ford, Chevrolet, Toyota and
Honda, scored above average this year, although Ms. Stephens said
the Japanese are slipping after years of dominance. Porsche AG, the
German sports car maker, is the best performer overall with 80
problems per 100.
FCA hasn't fared well on the study in recent years, and the
company noted in a statement that it notched some improvements vs.
the prior year. The latest scores come at a time when Chief
Executive Sergio Marchionne is looking for a buyer for the company,
which has been routinely criticized by industry analysts and
competitors for underinvesting in its product portfolio.
FCA sales in the U.S. have grown in the six years since Chrysler
was in bankruptcy and Mr. Marchionne first started combining the
No.3 U.S. auto maker with Fiat, which he had been running for
several years. Despite dozens of consecutive months of sales gains,
Mr. Marchionne says his company has less-than-stellar margins, and
the wider industry needs to consolidate if it hopes to thrive in
the future.
Mr. Marchionne has moved to repair quality problems. Last fall,
FCA's U.S. quality chief Doug Betts abruptly left the company, less
than a day after the auto maker's brands landed yet again at the
bottom of the heap in Consumer Reports' influential reliability
study.
FCA holds about 12.5% U.S. market share through May, compared
with Hyundai and Kia's combined 9%. Once just bit players in the
U.S. auto industry, Hyundai and Kia have charted a slow and steady
growth path over a 15-year period during which a bevy of new
products have appeared and North American production capacity has
been installed.
Ms. Stephens noted an important highlight of the study being
that GM, Ford and the Japanese are all about equal in initial
quality, a sign that the billions of dollars spent by the two
biggest U.S. auto makers' on improving products has paid off.
Still, she said the "big story" is the emergence of Kia and Hyundai
cars, crossovers and minivans as stars of a survey that South
Korean auto makers long struggled in.
This marks the second straight year Hyundai has been a top
performer. Ms. Stephens cited newly launched products and a focus
on technology as reasons Hyundai and Kia are leading other
brands.
"This is a clear shift in the quality landscape," Ms. Stephens
said. "For so long, Japanese brands have been viewed by many as the
gold standard in vehicle quality. While the Japanese auto makers
continue to make improvements, we're seeing other brands, most
notably Korean makes, really accelerating the rate of
improvement."
Write to John D. Stoll at john.stoll@wsj.com
Access Investor Kit for Porsche Automobil Holding SE
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=DE000PAH0038
Access Investor Kit for Porsche Automobil Holding SE
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US73328P1066
Subscribe to WSJ: http://online.wsj.com?mod=djnwires