(Adds Fiat Chrysler reaction) By David Shepardson WASHINGTON, Feb 28 (Reuters) - German automakers dominated Consumer Reports' annual ranking of automotive brands released on Tuesday, with Volkswagen AG's Audi leading the pack, while U.S. brands continued to lag despite gains for many.

Jake Fisher, director of auto testing at the magazine, said German automakers rose largely due to improvements in reliability. "Building one or two great vehicles is achievable, but making a whole lineup of excellent ones is much more difficult,” Fisher said.

Volkswagen's Porsche unit and rival BMW AG came in second and third. General Motors Co's Buick brand was the highest-ranked U.S. mainstream brand in 10th, down from seventh in 2016, while Ford Motor Co's namesake brand fell from 16th to 21th.

GM's Chevrolet brand moved up to 17th from 20th and its Cadillac brand moved up to 18th from 24th.

Toyota Motor Corp's flagship brand fell from eighth to 11th place, falling out of the top 10 for the first time in recent years, after the magazine said its Tacoma pickup had reliability issues.

Tesla Inc was ranked eighth among auto brands after previously not having enough models to be ranked.

Fiat Chrysler Automobiles' Chrysler brand jumped from 26th to 19th.

GM's Chevrolet Cruze was named best compact car, while its Impala won best large sedan.

Other top picks included the Honda Ridgeline as best compact pickup, Kia Optima best midsized sedan and Audi Q7 best luxury SUV.

The Fiat brand remained last again among all brands rated, and FCA's Jeep brand remained second-lowest overall. Consumer Reports does not recommend any Fiat Chrysler vehicles, while it recommends all Porsche, Mazda and BMW vehicles.

Fiat Chrysler said in a statement it welcomed feedback from Consumer Reports "as it helps guide our product improvements." The company added it is "aggressively pursuing both product and launch-quality improvements." Fisher said Fiat Chrysler models suffered from serious reliability problems.

Brand 2017 rank 2016 rank Audi 1 1 Porsche 2 4 BMW 3 5 Lexus 4 3 Subaru 5 2 Kia 6 9 Mazda 7 6 Tesla 8 not rated Honda 9 10 Buick 10 7 Toyota 11 8 (Reporting by David Shepardson; Editing by Cynthia Osterman)