Even the most patriotic U.S. car buyers seem to have given up on Detroit.

Five years ago, the Big Three automakers owned 62 percent of the market; last summer, sales of Detroit vehicles dropped below 50 percent. Plus, Toyota is expected to displace GM as tops in global sales after end-of-year figures are tallied.

True, high pump prices have dampened demand for gas-guzzling trucks and SUVs, which Detroit produces in spades. But the fundamental reason is that buyers lost faith in the home team and shifted allegiance to the visitors. As overseas carmakers built factories here, that shift grew easier, blurring the line between U.S.-made and foreign-made.

But Motor City is closing the quality gap. Perception just hasn't caught up with reality.

Buick ties Lexus, the perennial winner, for fewest problems in the latest J.D. Power & Associates report on the dependability of 3-year-old vehicles. Even more surprising: Cadillac and Mercury come next, outpacing Honda (fifth) and Toyota (sixth). Jeep, Pontiac, Ford, GMC, Chevrolet, Dodge, Chrysler and Saturn still fall below the industry average for dependability, but every nameplate except Chrysler reported fewer problems in 2007 than in 2006.

The most recent Consumer Reports reader survey on reliability also burnishes the reputation of the domestics. The survey includes model years 1998 to 2007, so the best nameplates (Honda, Acura, Scion, Subaru and Toyota) and the worst (Pontiac, Mercedes-Benz, Cadillac, Hummer and Land Rover) are the usual suspects.

But for the newest vehicles, Ford Motor wins big — 41 of 44 Ford, Lincoln and Mercury models score average or better in predicted reliability.

Domestic carmakers still have a ways to go. Of the newest Chrysler models, only two-thirds score average or better in predicted reliability, and only half of GM models earn average or better scores. Within the past year, Chrysler, Ford and GM have added longer-term powertrain warranties. That's a strong bet on their products' dependability.

The aesthetic appeal of Detroit's vehicles has improved, too. The 2007 Saturn Aura won North American Car of the Year plaudits. And the once-homely Malibu has a stunning redesign for 2008. GM in particular has listened to critics of its interiors, enhancing materials and design inside its vehicles.

Better reliability and appeal also boost resale values. For example, the new Malibu is expected to be worth 7 percent more (as a percentage of sticker price), compared with the outgoing model, after five years, according to Kelley Blue Book. Both Ford and GM had an average gain in resale value of 1 percent among 2008 models.

The unanswered question is whether Detroit can earn enough to stay in the game. Ford is in the most precarious financial position, but even in the event of a merger, it will keep churning out cars and trucks.


Mark Solheim is a senior editor at Kiplinger's Personal Finance magazine. Send your questions and comments to [email protected].