August 5, 2014

News & Features

J.D. Powers quality study: Automakers care, but do buyers?

Detroit Free Press

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The Hyundai Elantra earned top ratings in the 2014 J.D. Power Initial Quality Study. (Hyundai)

Should you care whether a new Chevrolet is less than 1 percent more likely to have a problem than a new Toyota? Whether a new Honda is 2.8 percent more likely to have a problem than either?

Some people who follow the auto industry asked those questions recently after J.D. Power revealed the latest edition of its Initial Quality Study (IQS) of new cars.

"The margin from the best cars to average and below average has diminished dramatically," Autotrader.com senior analyst Michelle Krebs says.

It's not like the 1980s, when vehicles with atrocious dependability and reliability were as common as oil leaks. J.D. Power's surveys became industry benchmarks then, but are they relevant today?

"You're talking about a fraction of a defect per car," says John McElroy, host of the TV show "Autoline This Week."

Quality leaders
    In the 2014 Initial Quality Study, Porsche ranked highest among all nameplates, followed by Jaguar, Lexus and Hyundai. General Motors received six segment awards — more than any other automaker — for the second consecutive year. To see the Initial Quality Study ratings, visit autos.jdpower.com/ratings/quality.htm.

Automakers follow J.D. Power's findings closely, but do quality scores translate to sales or profits? McElroy points out that Ford's sales, market share and profits rose in recent years, while the company's quality ratings tanked because of complaints about touch-screen controls and new transmissions.

Despite that, automakers await Power's reports with anticipation and dread. CEOs clear their schedules for the briefings. Executives and engineers pore over Power's data on what customers like and why. They seek the consultant's advice on vehicles they're developing.

"Virtually every automaker subscribes" to the incredibly detailed reports, says Dave Sargent, vice president of J.D. Power's global automotive practice.

The 2014 report was based on 86,000 customer responses about problems they experienced in the first 90 days of ownership. It gave automakers 6,000 data points on each vehicle line — all models of Ford Fusion, for instance — they build.

"It's the study automakers get most anxious about," Sargent says. "All the evidence says it matters." Some automakers base executives' bonuses and promotions on the results.
Over the years, the IQS has evolved from a simple catalog of things that broke and cars that wouldn't start to an evaluation of how new features work.

About two-thirds of the problems in this year's IQS are what Power calls "design problems" — things like poor voice recognition, rough-shifting transmissions and bad fuel economy. Power is reworking its long-term dependability study of 3-year-old cars to reflect the same factors.

"These are things the consumer cares about," Sargent says. Vehicles "breaking down is not the differentiator anymore. Controls, voice recognition, navigation systems and using the phone are the things that either please customers or drive them nuts."

But old-fashioned mechanical failures still happen, and they matter. Consumers should use IQS scores when they look for a vehicle, but remember the level of detail that might reveal a specific problem is reserved for Power's paying customers, the automakers.

If there's one figure to watch, it's probably the industry average number of problems per vehicle. Brands above it generally do well in other rankings. Brands below it struggle unless they have some unique appeal.

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