European cars get bad report card Neal E. Boudette Wall Street Journal Nov. 9, 2004 10:47 AM Once ranked among the auto industry's best in quality, European cars are becoming known for something else: unreliable performance. In Consumer Reports' preview of 2005 cars, released Monday, not a single European vehicle made it onto the magazine's influential "most reliable" list. Instead, the list of least-reliable vehicles reads like a roll call of what traditionally had been the industry's most prestigious and pricey names: the BMW 5 Series and 7 Series, the Mercedes S Class and E Class, the Jaguar X-Type and S-Type. The Saab 9-3 and the Volkswagen Jetta, Golf and New Beetle also rate far below average for reliability. Of the 38 cars rated least reliable, 20 were from European makers. In contrast, Japanese makes dominated the reliability ratings. Twenty-nine of the 32 cars rated most reliable were Japanese. Vehicles made by Toyota fared particularly well, including the Avalon, the Camry, the Highlander and the RAV4. American brands were in the middle, faring slightly better than the Europeans. Eleven American cars - including the Hummer H2, Chevrolet Astro van, Lincoln Navigator sport-utility vehicle and Chrysler Sebring convertible - were among the least reliable. Two made the grade as most reliable: the Buick Regal, which has been discontinued for 2005, and the Pontiac Grand Prix. Both are made by General Motors Corp. advertisement Long known for high quality, European brands have slumped badly in the past several years. In Consumer Reports' 2004 survey, Detroit car and truck brands ranked ahead of European brands on average - for the first time in 25 years. Other quality studies, such as the J.D. Power & Associates customer-satisfaction surveys, have shown a similar slide by the European brands. "The Europeans tend to engineer very complicated cars with lot of electronics that lead to problems," said David Champion, senior director for auto testing at Consumer Union, the publisher of Consumer Reports. The BMW 7 Series, for example, has more than 120 electric motors, including 38 just for adjusting its seats, and dozens of microprocessors to control everything from the humidity inside the car to the angle at which the wipers rest on the windshield. "The Japanese in general tend to try to simplify as much as possible," Mr. Champion said. Mr. Champion said the nagging quality problems European car makers are suffering will have an impact on their sales over time. Through October, U.S. sales of Mercedes-Benz cars have fallen 1.6 percent, while Volkswagen AG has seen U.S. sales for its VW brand slump 15 percent. BMW's overall U.S. sales are up 8 percent, thanks to the arrival of a new SUV, the X3. But U.S. sales of the 5 Series are down 5 percent; 7 Series sales have dropped 19 percent. In contrast, sales at Lexus, which is owned by Toyota Motor Corp., are up 12 percent. For Mercedes-Benz, quality problems are taking a bite out of the bottom line, too. In the third quarter, DaimlerChrysler AG said additional spending to take care of Mercedes quality glitches was part of the cause for a 62 percent drop in its Mercedes division's operating profit. The cars included on the "least reliable" list are not eligible for inclusion in Consumer Report's list of recommended vehicles. BMW AG's poor rating doesn't come as a surprise to Gerard Rabadeau, a 58-year-old financial adviser in Westfield, N.J. He bought a 2004 5 Series sedan earlier this year, and the trouble started the day he picked up the car. He ordered a 5 Series primarily because it was supposed to have "Bluetooth" wireless technology that would automatically connect his cellphone to the car's communications system. That would allow him to jump in the car and talk hands-free with clients while driving. But when he picked up the vehicle, the salesman explained the Bluetooth technology wasn't working yet, and he didn't know if BMW would ever get it to work. Within a week or so, the "key in ignition" warning started going off - even after he left the car with the key in his pocket. Later, the security alarm started blaring whenever he used his key-fob remote to pop the trunk. He has taken the car back to the dealership several times, but the problems continue to occur, and he is resigned to only opening the trunk manually. "I haven't had problems with the traditional engine, the transmission, but the electronics are a real pain," Mr. Rabadeau said. "It's frustrating. It's a $60,000 car." The survey is based on responses from Consumer Reports' approximately five million magazine and online subscribers. It compiled data on 810,000 vehicles and covered the 1997 to 2004 model years. CR averages the overall reliability scores for the most recent three years. For vehicles that have been significantly redesigned, the rankings used only data on the most recent version. That's the case with the BMW 5 Series, which was redesigned last year.