Are Japanese cars the most reliable? Think again

After years of setting the standard for quality and reliability, Japanese brand autos have dropped below the industry average, according to a new report by J.D. Power and Associates.

The latest Initial Quality Study, which ranks brands based on consumer surveys after owning a vehicle for three months, shows the collective results of Toyota (7203.T-JP), Honda (7267.T-JP), Nissan (7201.T-JP), Mitsubishi (8058.T-JP) and Subaru (9778.T-JP) are not keeping pace with the industry as a whole and the Korean auto brands, in particular.

"It's not that the Japanese models are all getting worse, but this shows they are not improving as fast as their competitors," said Renee Stephens, vice president of U.S. automotive quality at J.D. Power. "This is a clear shift in the quality landscape."

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Leading the way in quality, according to J.D. Power, are the Korean auto brands. They improved their results by 11 percent compared to last year, easily ahead of the auto industry's overall rate of improvement, which was 3 percent.

Their relentless pursuit of eliminating problems is paying off, Stephens said.

"The Korean automakers are focused on getting it right from the design process up front all the way through to the plants and with finished models," she said.

The study validates the decision Hyundai (1176-KR) and Kia made a few years ago to slow global expansion to ensure the quality of their vehicles did not slip. At the time, many in the industry openly asked if the Korean automakers were missing out on boosting sales by not adding more assembly plants around the world.