J.D. Power Roundtable Speaker Defines “Connected Auto Consumers”

Arianne Walker

Arianne Walker

Today’s digital lifestyle has a growing impact on the auto industry. Understanding how consumers who are in the market for a vehicle are “using digital information and how they are connected,” was a key focus in speeches and discussions at the recent J.D. Power Automotive Marketing Roundtable at the Bellagio Hotel in Las Vegas, NV.

Arianne Walker, senior director of media and marketing solutions at J.D. Power, introduced the October conference with highlights of trends in automotive Internet usage based on J.D. Power research. She also spoke about the rise in digital media consumption and identified how different devices—smartphones and tablets—are being used to gather information mostly at home, but also on the go—smartphones are also used for auto shopping on the dealer lot. Walker also discussed trends in content with social media and video and how traditional companies are reformulating automotive content in new ways. Continue reading ›

Large Pickup Truck Demand Comes Back; Compacts Remain Strong Sellers

2014 F-150Consumer demand for large trucks and compact crossovers (CUVs) continues to surge in the U.S. market. The Ford F-Series and Chevrolet Silverado are ubiquitous best sellers in the U.S. market through the first nine months of 2013, according to data analyzed by J.D. Power and strategic partner LMC Automotive. Two compact CUVs—the Honda CR-V and Ford Escape—also rank among the 10 best-sellers. Overall, one of eight vehicles purchased in the first nine months this year is a compact CUV or a large pickup.

Both the F-150 and Silverado large pickups outpaced the industry with combined gains soaring 21% to reach nearly 898,400 units—up some 155,000 units from the same period in 2012. Practically a stand-alone brand, the F-Series has been the best-selling model in the U.S. market for 31 straight years. More than 537,605 light- and heavy-duty F-Series trucks were delivered in the first three quarters of 2013—up 92,471 units from a year ago. The redesigned Silverado also saw sales surge by 62,575 units, to 360,775 units year-to-date. Continue reading ›

What Dealers, OEMs Can Do to Offset Sluggish Market in India

MohitArora

Mohit Arora

A slowing economy in India is creating more pressure on the country’s auto industry. In light of dimmer economic conditions, Mohit Arora, director and country manager at J.D. Power Asia Pacific, discussed the outlook for India’s dealerships and auto sales in a column in India’s Businessworld magazine. Excerpts from the column titled “Is it All Doom and Gloom at Car Dealerships?” are highlighted in this post:

Economic Front

A slowdown in GDP growth, industrial production and a decline in the value of the rupee against the U.S. dollar have observers jittery about India’s future growth prospects. Anticipated increasing pressure on inflation from higher fuel costs also is expected to negatively impact household expenses. It’s not surprising, then, that the automotive industry is feeling the pressure, with year-over-year new-vehicle sales down in double digits as fewer consumers visit their local showroom to buy a new vehicle.

What Do Dealers Anticipate?

Recently, we asked more than 600 auto dealers in India about their business and how satisfied they were with the support they were receiving from the manufacturer. The results from the J.D. Power Asia Pacific 2013 India Dealer Satisfaction with Automotive Manufacturers Index  Study (DSWAMI) showed that one in five dealers expected to report a loss in the financial year (2012-2013), which is up from 9% in the previous year. In addition, less than one-half (44%) of dealers anticipated that they would make a profit—down from nearly two-thirds (62%) in the prior year. Continue reading ›

Tata Motors: Remaining Competitive in India

Ammar Photo

Ammar Master

One of India’s major automakers, Tata Motors, is struggling in its home market as buyers are attracted to the competition’s products. Tata’s upgraded products lack excitement and the Nano’s current slump has brought up a question about the company’s ability to connect with young and aspiring consumers in India.

During the past few years, more competitors have been entering the critical sub‐compact car market, and Tata may have over-emphasized the importance of its Nano and the role of the model in the company’s portfolio.

Tata was riding high on expectations of a mass migration of India’s two‐wheeler buyers to the affordably priced Nano. When this did not happen, the Nano was in a position that failed to win buyers from stronger models such as the Maruti Suzuki Alto and Hyundai i10. Continue reading ›

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

Dave_Sargent

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 ›

Honda Goes After Share in India with Diesel Entries

Honda Group is getting ready to renew its competitive position in India’s passenger-vehicle market by introducing a slew of diesel models, starting with the soon‐to‐be‐launched Amaze sedan and Brio hatchback.What’s notable is that most Honda models will be equipped with a diesel engine. The only exceptions may be the Civic compact car and Accord midsize sedan.

Ammar Master

No doubt, Honda expects sales to improve in a big way with the launch of its diesel versions. However, LMC Automotive is more cautious since the government has sent a strong signal towards eventual deregulation of diesel prices in India. Admittedly, India’s government has not announced a price increase in diesel fuel, but it has put the onus on oil marketing companies to raise rates gradually in small proportions to bring them in line with global prices. As a result, the 40% price difference between petrol (gasoline) and diesel will slowly change over the course of the next year.

Diesel Amaze and Brio Hatchback to Launch in India Market

Having said this, we agree that having a diesel option is a must in India. Honda, therefore, is on course to correct a major disadvantage in India. We think combined sales of diesel versions of the Amaze and Brio models could make up about 60% of overall volume. Continue reading ›

Honda’s Mendel Outlines Growth Plans for Acura at J.D. Power Roundtable

NSX ConceptEveryone in our industry should be excited about Honda’s challenge to lead the development for a super car here in the U.S., John Mendel, senior vice president of automotive sales for American Honda Co., Inc., told participants at the recent J.D. Power and Associates 2013 Automotive International Roundtable. He further discussed how the Acura brand will fit into Honda Group’s future:

“I was excited to see the new Corvette Stingray in Detroit at the auto show. We provided an update of the 2014 Acura NSX Concept, showcasing the evolution of NSX from the concept model that we showcased last year. We’re heading toward production of that model. NSX is going to provide an exciting halo for the Acura brand when it comes to market in about two years.” Continue reading ›

Honda Sets Ambitious Sales Goal; Will Launch More Compacts

John_Mendel

John Mendel

In a keynote address at last month’s J.D. Power 2013 International Automotive Roundtable in Orlando, FL, that was co-sponsored with NADA, John Mendel, executive vice president, automotive sales at American Honda Motor Co., said he is proud of the larger role that Honda’s North American R&D group will play in global product development—including development of the all-new generation Acura NSX halo sports car and in taking a lead in Honda’s new global compact car initiative. Growth plans from his talk are excerpted:

“We set a goal to achieve an all-time sales record this year in 2013, which would mean meeting or exceeding our previous best of more than 1.55 million units that we sold in 2007. Last fall, our CEO announced very aggressive growth plans for global Honda. By the fiscal year ending March 2017, we’re challenging ourselves to achieve global automotive sales of 6.0 million units. In perspective, that’s up from 4.0 million last year. Almost one-third of that volume will come from the U.S., meaning annual sales of somewhere between 1.8 and 2.0 million units here in North America. Continue reading ›

Gap Continues to Diminish Between Vehicle Initial Quality and Dependability

Dave_Sargent

David Sargent

The dependability of vehicles in the U.S. market continues to improve, according to J.D. Power research as illustrated by the shrinking of the gap between initial quality of new models that are now three years old, according to our 2013 U.S. Vehicle Dependability Study (VDS), which is based on responses from more than 37,000 original owners of 2010 model-year vehicles after three years of ownership.

The industry average score gap between initial quality and dependability of models that are now three years old has narrowed to just 17 problems per 100 vehicles (PP100). Overall dependability is determined by the number of problems experienced per 100 vehicles, with a lower score reflecting higher quality.

In 2013, overall vehicle dependability averages 126 PP100—a 5% improvement from the 2012 average of 132 PP100—and is the lowest problem count since the inception of the study in 1989. Among brands measured in the study, 21 of the 31 included improve in dependability from 2012.

It’s also noteworthy this year in our VDS that the domestic and the Japanese brands achieve the largest year-over-year advances in dependability—each improve by 6% from 2012. Continue reading ›

Western Auto Conference New Media Site Panel Discusses Some Best Practices

During the recent NADA/J.D. Power Western Automotive Conference in Los Angeles, the panel of three automotive marketers from Facebook, Google and Microsoft’s Xbox joined a West Coast owner of multiple franchise dealerships who is an innovator with social media, to discuss how companies in industries beyond automotive are reaching consumers and creating best practices. Panelists’ perspectives on current and future business were excerpted in the first post, Western Auto Conference Panel Talks about How New Media Meets Consumers. In this second post, more insight on how companies in other industries are working with new media are excerpted.

Moderator: John Lisko, Executive Communications Director, Saatchi & Saatchi

Panel members:

Doug Frisbie, head of automotive for Facebook

Michelle Morris, Automotive Industry Director, Google, Inc.

Randy Shaffer, Western Regional Sales Manager, Xbox, Microsoft Corp.

Mike Sullivan, Dealer/owner of LAcarGUY Family Group in California*

John: Michelle and Randy, are there other industries outside of automotive with best practices that you can talk about?

Doug: One brand that I think has relevance that is an example of best practices is Samsung USA. They made Facebook a major part—across all channels—of their Galaxy S3 launch earlier this year. First of all, they focused on the pre-launch phase before the phone actually went on sale. They focused on growing their connection to their fan base. They went from about 1 million to 8 million people that they were connected with on Facebook. Right when the phone went on sale, they really leveraged reach. They wanted to tell everyone at that point about the new smartphone that they were launching. After that, they sustained that connection for a period during the post-launch.

Samsung USA really focused on their publishing strategy and made sure that things were locally relevant. They used geo-targeting. They also used some targeting capabilities that enabled them to reach specific device owners. They were able to customize that message after the post-launch period. I think it totally reached over 100 million people during that campaign and generated $130 million in sales that they attributed to the campaign, which was a significant return on their ad spend.

The reason I reference that campaign is that a smartphone launch is similar to a new car launch. It’s something that’s a very considered purchase. Both are high technology products. There are a lot of similarities with the pre-launch, the main spike during the retail launch period and the post-launch that are very comparable to automotive. Continue reading ›