Initial Quality in China Sets New Benchmark; Domestics Improve Significantly

Dr. Mei Songlin

China’s domestic brands are improving their initial vehicle quality and are narrowing the gap with international brands, which is reducing the overall problem rate in China to a record low, according to the 2013 China Initial Quality Study (IQS). At the industry level, overall initial quality averages just 119 problems per 100 vehicles (PP100) in 2013, which represents the lowest number of problems since the study was introduced in 2000.

The 2013 China IQS, which examines problems experienced by new-vehicle owners within the first two to six months of ownership, evaluates two general types of problems: design-related problems, and defects and malfunctions. Some 21,181 owners of new vehicles purchased between October 2012 and June 2013 in 46 major cities were surveyed for the study. The overall initial quality score for 2013 is determined by calculating PP100, where a lower problem incidence rate indicates higher quality. Continue reading ›

Local Brands in China Rise on Intender Lists; European Brands Remain Popular

China customers online 80410767Nearly one-third (31%) of consumers in China who intend to purchase a new vehicle consider purchasing a European model, although the percentage of consumers who intend to purchase a new domestic brand vehicle has increased significantly, primarily due to the inclusion of consumers in Tier 2 and Tier 3 cities, according to the 2013 China New-Vehicle Intender Study (NVIS).

The percentage of these intenders who, in the next 12 months, would consider purchasing a Chinese domestic model has climbed to 27% this year from 20% in 2012. China’s domestic brands are especially popular among consumers in Tier 2 (28%) and Tier 3 (42%) cities. In contrast, only 16% of consumers in Tier 1 cities consider purchasing a local model in China because these consumers perceive that Chinese domestic brands do not accurately reflect their social status, the study finds. Continue reading ›

Owner Expectations in China Hamper After-Sales Service Satisfaction

Mei Songlin

Dr. Mei Songlin

Overall customer satisfaction with after-sales service at authorized dealerships in China declines to 815 (on a 1,000-point scale) in 2013 from 832 in 2012, due to higher customer expectations related to the service experience, according to our 2013 China Customer Service Index (CSI) Study. Among all brands by origin, only the Korean brands improve their customer satisfaction scores in 2013.

The study examines satisfaction among 15,370 new-vehicle owners (between 12 and 24 months of ownership) who visited an authorized dealer’s service department for maintenance or repair work during the past 6 months. Typically, this period is during the vehicle warranty period. A few study highlights are summarized:

• The decline in customer satisfaction with after-sales service in China is driven mainly by a drop in satisfaction with China’s domestic brands (751), as well as with Japanese (831) and European brands (832). The foreign brands’ combined scores decline 29 and 17 points, respectively, vs. 2012. Continue reading ›

Domestic Brands Make Inroads in China New-Vehicle APEAL Study

Dr. Mei Songlin

Although international luxury brands—including Audi, BMW, Lexus and Mercedes-Benz—still achieve the highest scores in pleasing their new-vehicle owners, China’s domestic brands achieve a historic high in overall vehicle appeal, according to our 2012 China Automotive Performance, Execution and Layout (APEAL) Study, which examines how gratifying a new vehicle is to own and drive during the first two to six months of ownership.

After making major advances in initial quality this year, China’s domestic brands continue to make strides to narrow the gap with all international brands and earn an average APEAL score of 781 points (on a 1,000-point scale) with significant improvements in two major areas: audio/entertainment/navigation and seats.

It’s noteworthy that the average score for all international brands drops to 839 points from 847 in 2011, due to lower satisfaction in the vehicle exterior and storage and space categories. This drop in the average APEAL score of international brands negatively impacted the overall industry APEAL average score, which slipped 3 points to 822 points from a record high of 825 points in 2011. Continue reading ›

Some Unexpected Brands May Gain Sales with Engine Downsizing

Tyson Jominy

As we see new-vehicle buyers and lessees continue to shift from large to midsize vehicle segments and from midsize to small or compact segments, there has been a decrease in the size of engines. In addition, we are seeing that consumers who do not downsize are finding more fuel-efficient powertrain options at the segment and model level, according to our Power Information Network® (PIN) retail transaction data.

Detroit Automakers will Not be Left in the Lurch

An interesting change related to the shift to smaller engines this time around is who is leading the charge, and therefore who will stand to reap the gains. Two Detroit automaker brands, Ford and Chevrolet, are exclusively offering 4-cylinder engines in their freshened midsize cars—Fusion and Malibu, respectively. In addition, Ford offers 4-cylinder powertrains in their midsize crossovers and now offers a V-6 in the F-150 that is selling very briskly. In fact, the Ford EcoBoost powertrain sub-brand is turning out to be one of the early automotive successes of the decade. Continue reading ›

New-Vehicle Appeal in Competitive China Market Sets a Record

Dr. Mei Songlin

Major improvements by both domestic and international brands in China’s competitive auto market, along with the introduction of 54 new and redesigned models during the past two years, have helped advance overall new-vehicle appeal among China’s new-vehicle buyers to 825 (on a 1,000-point scale), which sets a record high and is 17 points above last year’s 808 index, according to our 2011 China Automotive Performance, Execution and Layout (APEAL) Study.

China’s auto market continues to be the powerhouse of sales growth for most automakers globally, with passenger-vehicle sales projected to reach 12.9 million units by the end of 2011. J.D. Power’s 2011 China APEAL Study, which is based on evaluations from more than 17,459 new-vehicle buyers in 37 major cities across China, provides a comprehensive review and update of some of the major changes related to the appeal of models and brands and the evolution of tastes and preferences of China’s consumers. Continue reading ›

BMW and Dodge Each Receive Three APEAL Segment-Level Awards

BMW and Dodge brands each receive three segment-level model awards—the most of any nameplates—in the J.D. Power and Associates 2011 US Automotive Performance, Execution and Layout (APEAL) Study.SM

Jon Sundberg

BMW models that delight their buyers or lessees the most after the first 90 days of ownership are: the BMW X3, Z4 Roadster and 5 Series. The last time that BMW earned three segment-level awards was in our 2007 APEAL Study.

Chrysler Group LLC’s Dodge brand also earns three segment-level awards. Two of the three models are redesigns—Dodge Charger and Durango—while the third model is the Challenger, which also is the highest-performing non-premium model in this year’s APEAL Study with a score of 867 (on a 1,000-point scale). This is the first time that Dodge receives three segment-level awards in a given year in the APEAL Study.

Ford and Honda capture two segment-level awards each, with Ford receiving awards for the F-150 and the all-new Fiesta, and Honda earning awards for the Ridgeline and redesigned Odyssey. In addition, 10 models from an additional 10 brands receive awards at the segment level in this year’s APEAL Study. The brands with one model award each are (in alphabetical order): Chevrolet, Hyundai, Land Rover, Lexus, Mini, Nissan, Porsche, Scion, Suzuki and Volkswagen. Continue reading ›

Vehicle Owners in Germany Less Satisfied; Mercedes Models Earn Most Segment-Level Awards

It’s been two years since the scrappage program was eliminated in the German auto market and satisfaction among owners of two-year-old vehicles in that country has slipped to an average of 807 (on a 1,000-point scale) this year from 813 in 2010, according to our 2011 Germany Vehicle Ownership Satisfaction Study (VOSS), which we conduct jointly with German auto magazine AUTO TEST.

Brian Walters

Among the four factors* measured in the study, only ownership costs has improved slightly. A 9-point fall in the vehicle quality and reliability factor is primarily due to a significant increase in reported problems—the rate of problems reported increased by 12 problems per 100 vehicles (PP 100) from 2010, mainly in the areas of vehicle exterior; heating; ventilation; and air conditioning.

On an encouraging note, we find that vehicle owners in Germany who say they are “delighted” with their dealer service experience are nearly 2.5 times as likely to return to the dealership for paid service work vs. less satisfied customers. Yet, there is a wide variance in service levels delivered by different brands. Continue reading ›

European, Domestic Vehicle Owners More Satisfied with OE Tires

Owners of 2009 model-year domestic and European brand vehicles are significantly more satisfied with the original tires on their cars and light trucks after two years of road experience than are owners of the same model-year Asian brand vehicles during the same time period, according to our 2011 U.S. Original Equipment Tire Customer Satisfaction Study results.

Casey Mier

This year’s U.S. Original Equipment Tire Customer Satisfaction Study, which is based on responses from more than 26,000 new-vehicle owners of 2009 or 2010 model-year vehicles, finds that satisfaction with tires among owners of domestic vehicles has increased by 23 index points, to 682 (on a 1,000-point scale) from 659 in 2009. Among owners of European vehicles, satisfaction with their vehicle tires has risen 9 index points, to 698 in 2011 from 689 in 2009.

However, satisfaction with tires among owners of Asian vehicles during this same time period has remained flat—637 in 2011 vs. 638 in 2009 and, in fact, tire satisfaction among owners of Asian nameplate vehicles is well below average in all segments except for the luxury segment.

An encouraging note in this year’s study findings is that owner-reported problems with tires at the industry level have decreased to 84 problems per 100 vehicles (PP100), compared with 88 PP100 in 2010. Also, nearly one-third of owners who indicate they have not experienced problems with their tires say they will recommend their tire brand, while only 21% of owners who experience even just one problem say the same. Continue reading ›