Hyundai Quality Improvements Step in Right Direction, Exec Says

DETROIT – Hyundai is pleased with its performance in the recent J.D. Power 2013 U.S. Initial Quality Study, but a top executive says there is more work to do.

The auto maker moved up from 18th in last year’s study to 10th this year, tied with Kia and Mercedes, and several of its models placed high in the rankings, including the Hyundai Genesis premium sedan and Santa Fe cross/utility vehicle.

Hyundai U.S. CEO John Krafcik says he is particularly happy with the rating of the all-new Santa Fe, noting new vehicles traditionally don’t perform well in the survey.

“J.D. Power talked a lot about how difficult it is to launch a new car with quality, and the Santa Fe came in third in its segment, which is terrific,” he tells WardsAuto at an event here where he is named automotive executive of the year.

“It shows if you work really hard, you can have a brand-new car and launch it well,” he says.

That bodes well for Hyundai’s future, Krafcik says, as the auto maker is preparing to launch a slew of new products, including a Sonata midsize sedan and a new version of the Genesis next year.

Unlike the Santa Fe, the Genesis is an aging model, currently in the last year of its product cycle. Yet that car performed well in the J.D. Power IQS, which Krafcik says shows the auto maker can build a quality premium car.

There were several changes in this year’s study, including a greater focus on in-vehicle infotainment systems. Some auto makers, such as Ford, saw their quality rankings drop in this year’s study due to customer complaints about infotainment systems.

Hyundai was not the target of similar gripes, Krafcik says, although it offers some sort of telematics technology in 70% of its vehicles.

He says the results reflect a dedication within the auto maker to make its telematics system as intuitive and trouble-free as possible.

“If you look at the brands that are technology leaders and have done well in IQS, there’s just a few companies like ours,” he says. “I think that puts us in a good position going forward because technology is going to increase in our vehicles.”

However, J.D. Power’s Dave Sargent, vice president-automotive, said this week the IQS results indicate no auto maker does telematics well.

Hyundai’s U.S. sales through May were up just 1.0% over year-ago to 296,003 units, and the auto maker has utilized every bit of its production capability to keep sales on a par with last year.

Krafcik says despite the constraints, there are no plans to add additional capacity, although he contends that would increase sales. Rather, he says, the auto maker is focusing on other objectives.

“We’ve taken the approach, which is unusual in our industry, of capping production until we’re absolutely sure we have our quality in place,” he says. “This J.D. Power survey is a hopeful sign that were doing this, but we still need to improve.”

The executive says Hyundai must improve in areas not related to the design of the vehicle or its technology.

“Where we were short are the easiest things to fix in the general category of things breaking or scratches and things like that,” he says. “Not high-tech at all, but fairly basic things we can put our SWAT team on to fix fairly quickly.”

Krafcik says Hyundai has no plans to introduce a pickup in the U.S. market, despite media reports to the contrary.

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