Toyota Loses Top Reliability Ranking

Results from Consumer Reports' annual Car Reliability Survey show Toyota fell two notches from the top and consequently will no longer receive automatic recommendations for its new and redesigned autos from the magazine. Despite Toyota's drop, Asian automakers control eight of the top-10 model rankings, led by Honda's Element, Acura's TSX and Scion's xA [Scion is a Toyota brand]. Porsche's Cayman took no. 9 and Buick's Lucerne V8 model took no. 10. Overall, the results show U.S. automakers are closing the gap with Asian rivals, especially at Ford, where 41 of 44 models achieved average or better scores in reliability. However, less than half of GM's autos were rated reliable. Toyota's struggles continue meanwhile, as the automaker has suffered three consecutive monthly sales declines and recently lost its U.S. chief, among other executives, who left for a position with Chrysler. This year marks the first time since the survey began in 1996 that the Camry was not "recommended." Toyota ranked third-overall in brand rankings behind Honda and Subaru. Ordinary shares of Toyota fell 2% ($107.53 ADR equiv. at ¥116.8/$1) to ¥6,280 Wednesday in Tokyo. Toyota's ADRs gained 0.7% to $108.90 on Tuesday. GM lost 4.1% to $39.41, Ford fell 2.3% to $8.78, DaimlerChrysler rose 0.1% to $106.10, Honda also gained 0.1% to $33.19 and Nissan lost 2.4% to $19.56.

Sources: Wall Street Journal, New York Times, FT.com
Commentary: U.S. Sept. Auto Sales Down, But Better Than Expected • Toyota Likely to Miss Domestic Sales Target • Toyota Camry the Most Shopped Car in August
Stocks to watch: TM, HMC, NSANY, GM, F, DAI. ETFs: EWJ, ADRA
Related: Consumer Reports Predicted Reliability: 2007 Survey [pdf]

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