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Hyundai tops Toyota in annual CarMD Vehicle Health Index

CarMD has released its third annual Vehicle Health Index, which for the 2013 tracked the frequency and cost of repairs for "check engine" problems of 119-million vehicles built between the 2003 and 2013 model years. For the first two years of the index, Toyota ranked at the top of the list, but this year's results see Hyundai moved to number one, pushing Toyota down a spot.
The Korean automaker's rise to the top has been "fueled by its low repair frequency," according to CarMD. Toyota is second to Hyundai in lowest repair frequency, but Toyotas also have the highest average cost of repair. (Interestingly, General Motors vehicles have the lowest average.) Both Toyota's and Hyundai's manufacturer "health" ratings suffered this year, but Toyota took a bigger hit, which also is what helped Hyundai achieve the top ranking.
While Hyundai is the top manufacturer in the index, the 2012 Toyota Camry is the top vehicle. The best-ranking Hyundai was the 2010 Elantra (behind three Nissan models and four Toyotas), which took the number eight spot. Hyundai has six other vehicles in the top 100.

Why Kia doesn't need a premium brand

Hyundai's creation of the Genesis luxury brand means it and fellow Korean brand Kia have finally hit the mainstream in the U.S. – as far as products are concerned – after nearly three decades of trying. Which is about as long as it took Toyota and Nissan to roll out Lexus and Infiniti, respectively. It's history repeating itself. Genesis is supposed to be the way Hyundai's premium models get the respect they deserve, without carrying the baggage of a name associated with frugality. Hyundai has, in fact, built up a reputation over the last decade or so for cars that compete head-on with class leaders, rather than aim to be 90 percent as good for 75 percent of the price. And because Kia shares a number of components with Hyundai, its vehicles have also steadily become not only better mainstream vehicles, but have continued to aim higher than their price points. Does Kia need to follow now in its parent's steps with a prestige brand to market its most expensive models? I'm aware of the Kia K900, the company's deepest foray into luxury territory notably occupied by Lexus. Kia, however, has consistently been pushing this $60,000 full-size luxury sedan along with $0 down, low monthly payment lease deals. Turns out there really aren't many people looking for a full-size Kia luxury sedan. Or maybe they're just waiting to get it for $20,000 in a couple of years. Consider the K900 and Genesis when I convince you Kia already makes upscale cars to rival those with premium badges. They just don't happen to be its most expensive model. Shortly after Hyundai's announcement it would spin its luxury models off into the Genesis brand, I spent a few days with a 2016 Kia Sorento SXL. And I'm willing to call it a more convincing attempt to get people out of luxury cars than the K900. Driving the Sorento is not an emotional experience. You feel parental driving it, thinking you might've forgotten to pick your kids up until you remember you don't actually have kids. But after settling into the nicely stitched and perforated leather seats, you respect its comfort, quiet and amenities. The headliner is soft, the stitching on the dash top is convincingly real and everyone is impressed by the sharp graphics on the touchscreen and the slick powered shade that reveals an expansive glass roof. A Kia Sorento costing more than $46,000 sounds absurd until you wonder how much better an Acura MDX or Lexus RX350 is when those cost as much as $10,000 more.

Foreign automakers pay from $38 to $65 per hour to non-union workers

As leaders for the United Auto Workers gather in Detroit for their Special Convention on Collective Bargaining to work out the negotiating stance for this year's new labor agreements with the Detroit 3 automakers, what they most want to do is figure out how to eliminate the two-tier wage scale. However, the lower Tier 2 wage has allowed the domestic automakers to reduce their labor costs, hire more workers, and compete better with their import competition. As it stands, per-hour labor rates including benefits are $58 at General Motors, $57 at Ford, and $48 at Fiat-Chrysler – a reflection of FCA's much greater number of Tier 2 workers. The Center for Automotive Research released a study of labor rates (including benefits) that put numbers to what the imports pay: Mercedes-Benz pays the most, at an average of $65 per hour, Volkswagen pays the least, at $38 per hour, and BMW is just a hair above that at $39 per hour. Among the Detroit competitors, Honda workers earn an average of $49 per hour, at Toyota it's $48 per hour, Nissan is $42 per hour, and Hyundai-Kia pays $41 per hour. The lower import wages are aided by their greater use of temporary workers compared to the domestics. Automotive News says the ten-dollar gap between those foreign camakers and the domestics turns out to about an extra $250 per car in labor, which adds up quickly when you're pumping out many millions of cars. That $250-per-car number is one that, come negotiating time, the Detroit 3 will want to reduce, as the UAW is trying to raise both Tier 1 and Tier 2 wages. Another wrinkle is that the domestic carmakers are considering the wide adoption of a third wage level lower than Tier 2. Some workers who do minor tasks like assembling parts trays kits and battery packs already make less than Tier 2, but the UAW will be quite wary about cementing yet another wage scale at the bottom of the system while it's trying to fight a bigger battle at the top. News Source: Automotive News - sub. req., BloombergImage Credit: AP Photo/Erik Schelzig Earnings/Financials UAW/Unions BMW Chevrolet Fiat Ford GM Honda Hyundai Kia Mercedes-Benz Nissan Toyota Volkswagen labor wages collective bargaining labor costs