Changes in Product Quality: Evidence from the Automotive Industry

The days of Japanese superior quality seem to be over now. The most up-to-date example comes from the automotive industry.

J.D. Power's 2018 US Initial Quality Study shows that Lexus - Toyota's high-end brand - is Japan's only automotive company to claim a spot among the top 10 car brands in terms of quality. What is even more peculiar, however, is that Hyundai's Genesis - the luxury division of Hyundai Motor Group (a brand that is less than 2 years old) is leading the pack at present.

The Koreans have certainly gone a long way since the days of the inferior quality Daewoo Tico and Nubira - cars that flocked Eastern Europe and Latin America in the early 1990s. Nevertheless, not even the biggest optimists at the time would have believed anyone who were to say that in the near future the Korean auto manufacturers will be representing the top 3 car brands in terms of quality. Well, it seems that these days are finally here; with Genesis, Kia, and Hyundai claiming the top 3 spotsin 2018, it may already be safe to say that S. Korea is slowly but continuously replacing Japan as the world leader in product quality.

History is, indeed, repeating itself. About four decades ago, after a along period of American domination in terms of product quality (across all industries), the Japanese - with their inexpensive, low fuel consumption cars - began a journey towards new product quality heights and overseas market expansion. Today, it is the Koreans who are doing pretty much the same.