* Ford competing with Japanese brands on quality -study
* Toyota, Honda dominate top of Consumer Report ranking
* Chrysler lags; only Ram pickup truck recommended (Adds Chrysler comment)
By Soyoung Kim and Bernie Woodall
DETROIT, Oct 27 (Reuters) - Ford Motor Co (F.N) has made the most progress in improving vehicle quality among major automakers, while Chrysler ranks at the bottom of the industry for reliability, according to an annual Consumer Reports survey released on Tuesday.
Asian automakers dominated the magazine’s influential list of recommended vehicles, with Toyota Motor Corp’s (7203.T) Scion ranked the top brand followed by Honda Motor Co’s (7267.T) flagship brand. Toyota’s flagship brand placed third.
Ford ranks as the only U.S. automaker that is competing with Asian brands with “world-class reliability,” Consumer Reports said.
About 90 percent of Ford’s vehicles achieved average or better reliability, the study showed.
Ford’s Mercury brand ranked tenth for reliability -- the only U.S. brand to make the top 10 list. The Ford brand ranked 16th and Ford’s luxury Lincoln brand ranked 20th.
“Ford definitely has closed the gap,” said Rik Paul of Consumer Reports. “We started seeing that a couple of years ago. We didn’t know at that time if it was a fluke or if it was something they were going to be able to maintain. Last year, they were still there and this year, they are still there.”
In contrast, Chrysler’s three brands all slipped further in the ratings. The Jeep SUV brand ranked 30th, with Dodge just behind and the Chrysler brand dead last in the ranking.
Consumer Reports said more than a third of Chrysler models through the 2009 model year were “much worse than average.”
Chrysler spokeswoman Jodi Tinson said the carmaker has heightened emphasis on quality in the past 18 months, which has cut its warranty claims by 30 percent.
“Eventually, Consumer Reports and other metrics will start showing improvements,” said Tinson. “It will take some time because we are living with the past.”
Chrysler emerged from bankruptcy on June 10 by completing the sale of most of its assets to a new company led by Italy’s Fiat SpA FIA.MI. Chief Executive Sergio Marchionne, who also heads Fiat, will announce on Nov. 4 a five-year business plan for turning around the No. 3 U.S. automaker, including new product plans.
Steve Rattner, the former investment banker who headed the Obama administration’s restructuring of GM and Chrysler, said last week that officials were divided about whether Chrysler could be saved, in part because Consumer Reports did not recommend any of its vehicles.
For the new report, the magazine endorsed one Chrysler vehicle, the four-wheel-drive version of the Dodge Ram 1500 pickup truck.
“It did well in (our) road tests and rates average in reliability,” the magazine said.
Many analysts say Chrysler desperately needs new vehicles to steer its faltering operations toward recovery. Chrysler’s U.S. sales plunged 42 percent in September from a year ago.
Marchionne said recently he was surprised at the lack of product development done by Chrysler’s previous owners, Cerberus Capital Management [CBS.UL] and Daimler AG (DAIGn.DE), in the two years before his arrival in June.
“Chrysler, well, they’re not bringing out a lot of product. You have to bring out product to improve,” Paul said.
NEW GM MODELS ENCOURAGING
General Motors Co’s [GM.UL] flagship Chevrolet brand, which accounts for more than 60 percent of GM’s U.S. sales, ranked 25th on the list.
The No. 1 U.S. automaker emerged from bankruptcy in July backed by some $50 billion in U.S. taxpayer funding. GM is counting on sales gains at Chevy at a time when it is selling Saab, Hummer and winding down Pontiac and Saturn.
The magazine said that 20 of GM’s 48 models have average reliability scores. The automaker has a number of “strong contenders” just released or in the pipeline, but it was too early to have reliability data on them.
“We have seen some of their newer models doing better so we do think perhaps they are on the right track,” Paul said.
Hyundai Motor Co (005380.KS), the only major automaker to increase sales in a slumping U.S. market this year, ranked eighth, unchanged from last year.
Besides its influence with car shoppers, the annual report is used by major automakers as a proxy for their performance in improving and maintaining vehicle quality.
Consumer Reports is published by the nonprofit Consumers Union and does not accept advertising. The publication’s “predicted reliability” study for new model vehicles is based on an average of consumer ratings of the same model in the recent years.
This year’s report on auto reliability was based on consumer feedback on more than 1.4 million vehicles, Consumer Reports said. The reliability results will be published in the magazine’s December issue, which goes on sale next week. (Reporting by Soyoung Kim and Bernie Woodall, additional reporting by David Bailey; editing by Matthew Lewis and Andre Grenon)