GM and Ford products on the comeback

NEW YORK (CNNMoney.com) -- The August issue of Consumer Reports magazine contains a rare, happy surprise for Detroit - a rave review of a General Motors SUV.

Consumer Reports is often seen as uniformly critical of vehicles from the Big 3 U.S.-based car makers. For example, not one domestic make was included in Consumer Reports' 2007 list of "Top 10 Picks," released in April.

2007 Saturn Outlook

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But according to a Consumer Reports staffer, recent introductions from Ford and GM show that they are capable of making genuinely competitive vehicles.

In addition, J.D. Power surveys show that buyers appreciate the improvements in recent GM and Ford products, sometimes even more than Consumer Reports' car testers do.

With GM and Ford sales in decline, successes like these will be particularly important.

Consumer Reports is, by any measure, the single most influential magazine when it comes to the cars Americans actually buy. Much of the success of Toyota and Honda in the United States can be traced to their rise in Consumer Reports' rankings beginning in the 1970s. A 2006 Forester research study showed that car shoppers trust Consumer Reports more than any other source of automotive information.

The magazine has always maintained that it has no reason to favor or attack any particular company. Consumer Reports, published by the not-for-profit group Consumer's Union, does not run any paid advertising and it doesn't write its reviews based on cars lent by manufacturers.

Its testers have simply not liked U.S. cars much in recent memory.

So it's all the more surprising to read this about GM's Saturn Outlook SUV: "With its roomy interior, the Outlook is an excellent alternative to a large, truck-based SUV for buyers who don't need the extra towing capacity or off-road ability of a truck. We also also liked the Outlook's agile handling, comfortable ride, and third-row seat that's hospitable for three adults."

In the placid language of Consumer Reports, that's high praise.

Jake Fisher, one of the car testers at Consumer Reports' Auto Test Center, credits GM for not just following what the Japanese car companies have done, something U.S. automakers have tended to do in the past.

With the Outlook and its cousins, the GMC Acadia and the Buick Enclave, GM has carved out a new niche: large SUVs that ride and handle like cars while getting relatively decent fuel economy - all without sacrificing interior space.

"I think Toyota and Honda are going to be in kind of a catch up mode," said Fisher.

This is part of a trend for GM and its cross-town competitor Ford, said Fisher. Ford and GM are "getting ride and handling right," he said, "and they're getting interiors right, which is a big change for GM."

Ford has recently had big scores with its Fusion sedan and its close cousins, Mercury Milan and Lincoln MKZ, said Fisher.

The Fusion earned the magazine's highest possible recommendation, signified by a check mark with a circle. Perhaps more surprisingly, the V6 version of the Fusion actually has better "predicted reliability," according to the Consumer Reports, than V6 versions of the Toyota Camry or Honda Accord.

For its part, GM has a serious contender in its Aura sedan, said Fisher, a car that bodes well for the upcoming 2008 Chevrolet Malibu due to roll out later this year. That car shares most of its engineering with the Aura. "GM's getting real serious about midsized cars," said Fisher.

Not everything these companies turn out now has been so successful. Consumer Reports is not particularly fond of the new Ford Edge, for example. "The handling is lackluster, fit and finish is subpar, and the transmission is not as smooth or responsive as it should be," the magazine says in its review.

Consumer Reports ranks the Edge at the bottom of the pack among midsized SUVs in its August issue, even though it managed a "very good" rating.

In addition, the magazine's reviewers just took delivery of a 2008 Saturn Vue, a newly redesigned GM product. So far, said Fisher,"We're not blown away by it."

Consumers don't always agree with Consumer Reports. For example, the Edge finished at the top of its class in a recent J.D. Power & Associates APEAL survey that looked at how well people actually liked their recently purchased cars.

Sales of the Edge have also been extremely strong, backing up J.D. Power's contention that its APEAL survey is an even better predictor of market success than professional reviews.

Newer Ford and GM products have been ranking higher in owner satisfaction surveys, said Joe Ivers, executive director for research with J.D. Power, as well as in surveys rating vehicle quality.

Placing second and third after the Edge in J.D. Power's APEAL rankings were the same Saturn Outlook and GMC Acadia SUVs that Consumer Reports lauded. (The related Buick Enclave was released too late too make it into that study.)

"The thing that both these vehicles excel in the most is exterior styling," Ivers said of the Edge and Outlook.

Chrysler hasn't been following the trend in terms of improving the way its products are seen by critics and consumers.

Of the five "Most Disappointing" new models listed in Consumer Reports' annual April Autos issue, four - the Jeep Compass, Dodge Caliber, Dodge Nitro and Chrysler Sebring - were Chrysler products. (The fifth was the subcompact Toyota Yaris.)

Likewise, Chrysler has not done well in J.D. Power surveys, said Ivers, ranking low in quality and owner satisfaction. In J.D. Power's latest Initial Quality survey, all three Chrysler brands - Chrysler, Dodge and Jeep - scored well below average. In the J.D. Power APEAL survey, the three Chrysler brands all ranked among the bottom five.

For its part, Chrysler does not see the situation as being as dire as all that. Surveys and selected media reviews, like those in Consumer Reports, don't encompass all that people feel about their Chrysler products, said Sam Locricchio, a Chrysler spokesman. Also, even though the rankings in J.D. Power surveys may be low, the brands are still seeing improvements year over year.

Interior quality has been a problem, Locricchio acknowledged, which is why Chrysler opened a special interior design studio in October of last year.

Just as GM and Ford are turning the corner on their on products, though, said Fisher, they are now faced with another problem. The competition just isn't getting any easier.

"Their biggest problem right now is Hyundai (Charts)," he said.