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Which companies make the best cars?
Global fight with intriguing results

Last year was a tough time to sell American cars. Ford lost $6.1 billion in North America in 2006. Chrysler built thousands of vehicles that even some of its own dealers didn’t want. And the percentage of car buyers who bought American nameplates continued to fall, to 54 percent from 66 percent in 2000.

At the same time, sales of cars from Japan and Korea rose sharply. With both Ford and General Motors slumping, 2007 could be the year that foreign carmakers sell more cars in the U.S. than Detroit does.

To shed light on why some automakers are thriving while others are spinning their wheels, Consumer Reports dug deep into its own data to show the highs and lows for major carmakers. We analyzed how vehicles performed in a battery of CR’s road tests, coupled with reliability histories based on more than 1.3 million vehicles, representing 250 models. We huddled with CR’s team of expert auto engineers and interviewed business analysts who follow the industry closely.

Here’s what we found:
  • No carmaker does everything right. Volkswagen builds vehicles that perform very well in our testing but vary in reliability. Despite very good reliability, not all Toyota models score well.
  • Just because a car is Japanese doesn’t mean it’s a great car. Honda,Toyota, and Subaru make consistently reliable cars, but other Japanese automakers have mixed results.
  • U.S. automakers build some good models. But many vehicles are mediocre, and even the best seldom rise to the top of their categories against stiff competition.
  • Some automakers’ vehicles consistently do well in important areas such as handling, braking, or fuel economy, which weigh heavily in our Ratings.
We think consumers should focus on buying the best car for their needs, no matter who builds it or where it is built. The automakers that typically do best in our Ratings tend to build well-rounded vehicles that appeal to a broad audience. “Buyers want impeccable quality, reliability, basic space for what they have to do, package size, good performance, and good fuel economy,” says David Cole, chairman of the Center for Automotive Research, a consulting group in Ann Arbor, Mich.


If the only things that mattered to a car buyer were performance, comfort, and safety, Volkswagen would be at the top of the heap. Its Volkswagen and Audi models do well in handling, braking, and standard safety features. But few VWs have decent reliability.

Mercedes-Benz is an even more striking example. Its cars have the fourth-highest average test score at 77. They handle well, are nicely finished, and ride comfortably. But none has good-enough reliability to be recommended. By contrast, Toyotas have been very reliable, but some models such as the FJ Cruiser SUV and Yaris subcompact were disappointing in our tests.

Cars from Detroit automakers range across the lot in reliability. Ford has a number of good cars that did well in our survey, but about a quarter of the Ford products we have tested had below average reliability. GM also builds some vehicles that did well in reliability, but about one-third of the tested GM vehicles were rated below average.

While our surveys show that reliability of new American cars and trucks has been getting closer to the levels of Japanese vehicles, Cole says there is a limit to easy improvements.

Overall we recommend a much smaller percentage of U.S. cars than Japanese makes (37 percent vs. 80 percent), mainly because their reliability is hit-or-miss, not consistent like that of vehicles from some Japanese companies. We do not recommend models with below-average reliability. American vehicles tend to be more reliable than those from Europe. The consistently high reliability of some Japanese companies, such as Honda, Subaru, and Toyota, allows us to recommend their new models.


Honda and Toyota are lauded for their reliability and have built a number of high-rated models, including 7 of our 10 Top Picks. But we found that not all Japanese cars excel.

“Honda and Toyota are really on a pedestal,” says James Rubenstein, an automotive analyst at Miami University, in Oxford, Ohio. But other Japanese makers, such as Nissan, Mazda, and Mitsubishi, have struggled to build high-quality cars consistently.

Nissan’s lineup, on average, actually scores above Toyota’s in CR’s tests, 75 vs. 70. Nissan also produces several of the most reliable cars in our survey, including Infiniti sedans. But three Nissans--the Armada,Titan, and Infiniti QX56--were among models with the most reliability problems in our survey; all are made in the same plant in Canton, Miss. Ford vehicles, in comparison, have slightly better reliability in our survey than cars from Nissan.

Mazda vehicles test well, but reliability has been hit-or-miss. For example, it took several years for all versions of the Mazda6 to come up to average reliability. The average Mitsubishi scores only a 60 in CR’s testing and has average reliability. Mitsubishi’s Eclipse sports coupe scored too low in our road tests for us to recommend it. Though every manufacturer has recalls, even Toyota has taken some heat over its 10 recalls of 657,000 vehicles in the past year, although that is not a factor in our reliability Ratings.


In our testing, we found that some recent models from Ford and GM are competitive with the better Japanese or European models. For example, the Ford Fusion, Mercury Milan, and Cadillac CTS scored well in our tests. The Fusion/Milan has excellent reliability.

Even so, American cars seldom lead their categories against excellent competition. Consider the Ford Five Hundred and its siblings, the Ford Freestyle and Mercury Montego. They all scored well in our testing and are recommended models. But the Five Hundred and its siblings “didn’t have any styling or features or technology that the Japanese hadn’t had for years,” says David Healy, an auto-industry analyst with Burnham Securities.

Ford’s chief engineer, Paul Mascarenas, says that when redesigning its models, Ford is now using competitors’ vehicles as its benchmarks instead of just improving on its own outgoing models.

A contrasting case is GM’s Chevrolet Impala. Although updated last year, the car has a dated platform and engine. Interior materials improved, but the rear seat was cramped for such a large sedan, and fuel economy was mediocre.

One big hurdle that U.S. manufacturers face is cost. They “have to take billions out of new car development or marketing to cover the legacy costs” for retiree benefits, says Jim Hall, a vice president at the AutoPacific consulting group.

Limited development budgets are a particular problem, given the recent competitiveness of value-priced models from Korean manufacturers Hyundai and Kia.


The areas where many U.S. cars fall down are many of the same ones that we consider most important, such as reliability, fuel economy, braking, and handling.

General Motors, the largest automaker, has had some hits and misses, judging by the 42 models we have tested. The Chevrolet Avalanche and Corvette rank near the top of their classes in our testing. But lackluster products such as GM’s outdated minivans and compact pickups counter their good scores. Many GM vehicles wind up with mediocre test scores because of subpar braking, emergency handling, and real-world fuel economy. On the plus side, fit and finish of GM models has greatly improved.

Ford’s cars consistently handle well and ride comfortably, and its trucks and SUVs have good interior space and utility. But braking, refinement, and fuel economy are typical complaints.

Chrysler has the lowest test scores after Suzuki, at 51. Several new Chryslers, including the Sebring and the Dodge Caliber, have noisy engines, bad visibility, and cheap-looking interiors. One of our engineers likened sitting in a Caliber to being in a plastic ice cooler.

Some companies with smaller lineups consistently design well-rounded vehicles. All the Hondas we tested were reliable, and most had smooth, refined engines and transmissions, good fuel economy, handling, fit and finish, and crash-test scores. Almost all suffered from road noise. Mazda also has a smaller lineup, and all but one had good handling and braking in our tests. Most were noisy.

Like GM,Toyota has a large lineup, increasing the challenge of producing consistently excellent vehicles. Eight other automakers had higher average scores, leaving Toyota just mid-pack in this respect. While tested Toyota vehicles are very reliable and most have good fuel economy, they lacked agility in our testing.


Technology that aids fuel economy also sets automakers apart. Higher-tech multivalve engines, improved fuel injection, and diesel or hybrid technology improve efficiency but add cost. Some carmakers have also adopted expensive yet efficient five- and six-speed automatic transmissions to improve fuel economy and performance. But domestic automakers have been using older four-speed automatics. While 69 percent of GM models are still available with four-speed automatics, only 33 percent of Toyotas are. Four-speeds are in 39 percent of Ford’s lineup and 64 percent of Chrysler’s. All models from Audi, BMW, Honda, Mercedes-Benz, Volkswagen, and Volvo have at least five speeds.

Mascarenas says Ford, which has advanced five- and six-speed transmissions and CVTs in much of its lineup, will have higher fuel-economy targets, evident in its lineup, by the 2009 model year.

When we compared fuel economy vs. acceleration, BMW, Honda, Mazda, and Toyota were top performers. Chrysler, Ford, GM, Hyundai, and Subaru vehicles had the least performance per gallon.

“U.S. automakers pay lip service to fuel economy, and there is some drift in that direction,” says Healy. “But it is not a stampede.”

Bob Lutz, General Motors’ head of global product development, acknowledges that “there has been this perception that Ford, GM, and Chrysler are not forthcoming with new technology.” He says GM has pushed cylinder cut-out technology that disables half an engine’s cylinders when power demand is low. Most of those engines, however, are in large vehicles with unimpressive fuel economy. (Honda and Chrysler also use the technology.)


Hall, at AutoPacific, says that from the 1970s to the ‘90s, Detroit’s attention was focused on finance, sales volume, debt repayment, and other factors--everything but customers. “The domestics are trying to fix three to four decades of not caring about the product,” he says, “and that’s not going to be turned around overnight.”

For American carmakers to catch up, they can no longer afford to merely improve on their older models, experts say. They must build better cars than Honda and Toyota.

“There’s been a big change in attitudes at those companies,” says Rubenstein. “It took them forever to own up to the fact that they weren’t competitive. Now they’re trying to buy enough time to finish fixing it.”

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