Building Loyalty, Improving Service are Keys to Satisfaction in Germany’s Auto Market


Mark Lendrich

In light of a less-than-robust outlook for new-vehicle sales in Germany during the next few years, automakers and dealers need to focus on loyalty, awareness of crucial factors that influence the purchase decision, and they need to improve service business, according to our 2013 Germany Vehicle Ownership Satisfaction Study (VOSS), a collaborative effort with AUTO TEST, the magazine in Germany for readers planning to buy a new car.

In 2013, overall satisfaction among owners of one- to three-year-old vehicles in Germany averages 789 points (on a 1,000-point scale). In the 2013 study, vehicle appeal, which accounts for 27% of the index weight, and ownership costs (25%) are the two key drivers of overall satisfaction. The remaining two factors evaluated and their weights are: vehicle quality and reliability (24%); and service satisfaction (23%). Continue reading ›

Satisfaction with Auto Insurance Providers Dips in 2013


Jeremy Bowler

Customer satisfaction with auto insurance companies in the U.S. market declines by 10 points to 794 (on a 1,000-point scale) from a record high in 2012, according to our 2013 U.S. Auto Insurance Study, mainly due to a sharp increase in the number of customers who have experienced premium increases.

Although the study’s overall satisfaction average dips in 2013 vs. 2012, it is the second-highest index since the study launched in 2000. The major declines this year across all five factors measured in the study are with the price and policy factors—each declines by 13 points from 2012. These two measures contribute the most to lower overall satisfaction.

Premium Increases Climb by an Average of $40

In 2013, the dollar amount of premium increases averages $153, which is $40 higher than the average rate increase of $113 as reported in the 2012 study. We see that when there is an annual rate increase of $50 or less, only 9% of customers switch insurers. However, that nearly doubles to 18% when the rise is between $51 and $100, and it climbs to 32% when the increase is more than $200. Continue reading ›

U.S. Auto Market Retains Strong Selling Pace and Higher Transaction Prices


John Humphrey

During the first two weeks of June, sales and leasing activity of new cars and light trucks in the U.S. auto market continued to build momentum, according to a monthly sales forecast update from J.D. Power’s Power Information Network® (PIN) and strategic forecasting partner LMC Automotive. Robust demand so far this month is matched by healthy transaction prices, despite weaker premium brand segment sales, partly due to older product lineups that will be revitalized by new model introductions later this year.

Retail new-vehicle sales in June are projected to rise by 14% (on a selling-day adjusted basis*) from a year ago and reach nearly 1.12 million units, which represents a seasonally adjusted annual selling rate (SAAR) of 13.2 million units. The June retail sales pace is up nearly 500,000 units from the past month’s 12.7 million-unit pace and will be up more than 1 million units from the 12.0 million-unit SAAR in June 2012. Continue reading ›

Chevrolet Dominates in Model Segment-Level IQS Rankings

General Motors models receive the most segment awards for initial quality in the J.D. Power 2013 Initial Quality Study (IQS). The Detroit-based automaker’s Chevrolet, Buick, Cadillac and GMC nameplates altogether produce 8 of the 26 model-level segment award winners. The next brands with the most problem-free models at the segment level are manufactured by . . . Continue Reading Chevrolet Dominates in Model Segment-Level IQS Rankings

Porsche Earns Highest IQS Ranking; GMC and Chevrolet Make Top Five

Porsche, the luxury brand that is part of Germany’s Volkswagen Group, ranks highest in initial quality among all nameplates included in the J.D. Power 2013 Initial Quality Study. This year, the German premium sporty brand averages 80 problems per 100 vehicles (PP100).

Following Porsche in the initial quality rankings this year is GMC, the . . . Continue Reading Porsche Earns Highest IQS Ranking; GMC and Chevrolet Make Top Five

Defects can be Fixed; Design Problems Remain Obstacles to Initial Quality


David Sargent

Nearly two-thirds (64%) of the problems that buyers and lessees identify in their new vehicles during the first 90 days are related to poor design and technology-related issues rather than manufacturing defects or malfunctions, according to the newly revamped J.D. Power 2013 Initial Quality Study (IQS).

In addition, this year’s IQS determines that defects, which account for a much smaller percentage (34%) of the problems in the redesigned study, are more likely to be fixed at the dealership, whereas design problems may last the lifetime or life cycle of the vehicle, which could be five or more years.

Revamped Initial Quality Study (IQS) Details Owners’ Feedback

Completely recast for 2013, the new IQS captures design-related problems and defects or malfunctions experienced by buyers and lessees in their new vehicles during the first 90 days of ownership. The new IQS survey is conducted online rather than by a mail-in questionnaire, which means there is an opportunity to gain more detailed feedback from new-vehicle owners.

A year ago, in the 2012 IQS, we observed that technology challenges were responsible for a majority of initial quality problems. In 2013, issues with technology continue to be the bane of both new-vehicle owners and manufacturers and adversely affect the auto industry’s overall initial quality index in 2013, which averages 113 problems per 100 vehicles (PP100). Although the number of problems cannot be compared with past years’ results due to study redesign, some of the same problem areas identified in the previous year’s study remain in the 2013 study’s results. Continue reading ›

Chinese and U.S. EV Makers Face Good News and Challenges

EVSymbolIn recent months, several China-based electric vehicle makers have been making headlines with announcements of new EV contracts in the U.S. market, while several U.S. EV makers, based in California, have been facing new challenges.

Additionally, in May, Tesla Motors made an offer to raise capital and also paid off its government loan, while Fisker Automotive may have another chance to survive with news of a possible purchase bid from several suitors.

Meanwhile, Chinese vehicle maker BYD Automotive Co., which boasts Warren Buffet as a major investor, recently signed a contract in the United States with the city of Long Beach in California to build 10 electric buses at a former RV facility in nearby Lancaster, CA. This arrangement allows BYD (Build Your Dreams) to take advantage of buy-American subsidies for electric vehicles and public transportation. BYD reportedly has made 1,000 electric buses, most of which operate in China, and has completed a pilot program with Hertz, according to the company. Continue reading ›

Who is the Winner? EVs or Flex-Fuel Vehicles and Biofuel?

bangkok-thailandIn looking at the future of alternative fuel vehicles—principally electric vehicles (EVs)—in the Thai market, it appears that the only push for promoting EVs is coming from the Electricity Generating Authority of Thailand (EGAT). In fact, the only comprehensive study on EV use in Thailand has been conducted by EGAT, which suggests that shifting electricity generation at power plants for use in electric vehicles would improve plant efficiency. However, can this alone be the driving force for consumers to move to purchasing EVs? The answer is an emphatic ‘No.’

Thailand’s Future Energy Plans Focus on Biofuel

A major obstacle in transitioning to EV use in Thailand comes in the form of the government’s Alternative Energy Development Plan (2008‐2023), which clearly shows that planned energy output to serve the transport sector for the next decade will be provided by biofuels, not electricity.

Thailand has an abundant supply of sugar cane, which can be processed into ethanol. Ethanol is an alcohol-based fuel made by distilling and fermenting crops, such as sugar cane, and more experimental sources such as cassava and molasses. Continue reading ›

India’s Auto Dealers Anticipate Lower Profits; Express Need for Exciting Models


Mohit Arora

Only 44% of India’s dealers expect to be profitable in the 2012-2013 fiscal year, partly due to a slow-down in new-vehicle sales as well as a dip in satisfaction with the available product lineup, according to our 2013 India Dealer Satisfaction with Automotive Manufacturers Index (DSWAMI) Study.

The study, which is based on responses from 618 dealership general managers or principles across all major nameplates, measures dealer satisfaction with automakers and importers in India* and identifies dealer attitudes about the retail business now and in the future.

Key findings from this year’s study are highlighted:

• In 2013, the largest decline in dealer satisfaction is in parts operations, with notable brand level declines in the areas of prompt delivery of parts and ease of ordering parts.

• Satisfaction with product lineup also declines this year. On average, 82% of dealers indicate their brand provides a model range that is effective in a highly competitive auto market. Continue reading ›

White Gains Favor in Early 2013 as Popular Vehicle Exterior Choice

tysonjominy Blog

Tyson Jominy

The Great Recession is over* and the U.S. economy’s slow but reasonably stable return to health may have had a slight impact on the change in exterior color choices among new-vehicle buyers. Neutral color choices still dominate: black, white, silver and gray. But white has gained favor from a year ago, at the expense of other choices—especially in the premium or luxury sales mix.

Although black (21.6%) remains the most popular exterior paint color choice for all model-year new vehicles purchased in the first four months of 2013, white (20.8%) has made inroads this year in comparison to the same 4-month period of 2012, according to Power Information Network® (PIN) retail transaction data** from J.D. Power.

More than one in five new vehicles purchased or leased in the first four months of 2013 was black, and the same was true for white vehicles. However, the percentage of black new vehicles dipped 1.0 percentage points from 22.6% a year ago, while the percentage of vehicles selected with white exteriors rose by 1.5 percentage points from 19.3% in the first four months of 2012. Continue reading ›