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June 29, 2007

New Drivers, New Perspectives

My friend told me that his daughter, who turns 16 this month, wanted a Volkswagen New Beetle or a MINI for her birthday "because they're cute." My friend's daughter didn't explain why those particular models interested her, but I think "driving something stylish" was the primary, and perhaps the only, criterion. Practical issues such as safety, fuel economy, reliability, and affordability were not factors in her decision.

Finding the right car for a newly-licensed driver is not easy. For the past few months, my friend has been calling me at least twice daily and with a new question each time. "Which is safer, the New Beetle or the Mini? Is the Mini really that good? What about Scion? Do you think she'd like a Scion? What do you think about certified used cars? Is Audi good?"

In the beginning, I was happy to provide my perspective. I gave comprehensive answers and clear, objective advice. Lately, however, I've begun to realize that although my friend hears me, he's not really listening. Each time I finish answering, he immediately says something like "that's great" or "oh, I couldn't agree more." Then he moves on to other automotive topics with a host of new questions. "Should I lease or buy? Are extended warranty plans worth the money? Should I put a down payment on a lease? Why is buying a car so difficult?"

I can't keep up. Lately, I've adopted his strategy, responding with a well-placed "right," "uh huh," or "exactly" to make him think I'm listening, but I'm really not. I think his problems started when he asked his daughter what kind of car she wanted. Her initial response was "either a BMW or a Mercedes, preferably a convertible." At least she is honest, and I don't blame her for trying. At her high school in Thousand Oaks, California, it's not uncommon to see teenage drivers piloting expensive European sedans or Cadillac Escalades and Chevy Corvettes, courtesy of generous parents.

I know my friend wants to satisfy his daughter's self-professed sense of style, but asking a new driver what kind of car she wants is like asking an indoor rock climber what it's like to climb Mount Everest. When her father brought her back to reality and explained the financial aspect of the decision, she didn't quite understand. I know she heard him, but she also wasn't really listening. Eventually, she acquiesced, resigned to the fact that she'll never be the envy of her high school classmates.

In the end, it came down to affordability. After her father test drove the Mazda3, the MINI, the New Beetle, and various Scions, he narrowed the choice to two models, the MINI and the New Beetle. With a few options and a three-year lease, the Beetle was $238 with drive offs—mostly taxes and registration fees—which equal $1,700. He also test drove the MINI, for which he was quoted $385 a month with $1,000 down. Although he felt that the MINI was "in a different class," he couldn't justify the $147 difference in monthly payments.

I wonder if he would have made the same decision if he had really listened to my advice.

June 28, 2007

Women Want Reliability, Comfort, Styling

What′s important to women when they select a new vehicle? The answer to this question, as well as responses to more than 100 other questions regarding vehicle styling and performance, can be found in the J.D. Power and Associates 2007 Automotive Performance, Execution and Layout (APEAL) Study. The study provides feedback and real consumer data to measure what new-vehicle buyers, in this case, women buyers, who have owned their vehicle for 90 days have to say about the performance, features and styling of their car, crossover, utility or truck.

In this year′s APEAL study, the top five factors that women respondents identify in choosing a new vehicle that will please and engage them are, in order of importance: 1) vehicle reliability/durability; 2) interior comfort; 3) exterior styling; 4) quality of workmanship; and 5) gas mileage.

Each factor and the models with the highest percentage of ratings from women buyers are described below.

Reliability/Durability

Women between the ages of 24 and 39 years want their new vehicle to be reliable and durable. In fact, 63% say that is the most important factor in selecting a new vehicle and determining if a new model pleases them, according to the study. Results indicate that two Honda models, the Accord and the redesigned CR-V, earn very high percentage ratings for durability among women respondents.

Interior Comfort

More than half of women respondents say interior comfort is an important factor when choosing a new vehicle. In this year′s APEAL study, the Hyundai Azera receives very high percentage ratings in interior comfort from women buyers. The flagship Hyundai model, which competes with segment best-sellers like the Chevy Impala, Dodge Charger and Chrysler 300, offers standard content more often found in premium models, such as eight air bags, anti-lock brakes, electronic stability control, an auto-dimming rearview mirror, power-adjustable front seats and LED taillights. The Azera has also ranked as the study's most pleasing model in the large car award segment for two straight years

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Another model that receives very high percentage ratings for interior comfort from women buyers is the redesigned Mercedes-Benz S-Class. The S-Class receives segment awards in both the APEAL and Initial Quality Studies. The S-Class also distinguishes itself by earning the highest APEAL score across all models as rated by both male and female respondents.

Exterior Styling

The look and image of a vehicle is third on women owners′ lists. Exterior styling is important to younger women; nearly half list it as one of the top three factors in choosing a new vehicle. Two very different and dynamic models stand out in terms of styling, according to women new-vehicle owners. Women buyers of the Cadillac Escalade EXT, with its heavy-duty bling and lots of passenger and cargo space, and the sleek Porsche Cayman sports car give these models very high percentage ratings for exterior styling. Both models receive segment awards in APEAL.

Quality of Workmanship

What is the first model that often comes to mind when thinking of quality of workmanship? With a longstanding customer satisfaction reputation for quality, the redesigned Lexus LS 460 continues to serve as a benchmark. Women who purchased a new Lexus LS 460 give it very high percentage ratings for quality. The new LS 460 also ranks as one of the top three models in the large premium car segment award categories in both APEAL and Initial Quality.

Fuel Economy

This year, as the price of gasoline continues to rise, women list fuel economy as a bigger factor in selecting a new vehicle. The APEAL study finds that fuel efficiency now ranks as one of the top five factors among women buyers in selecting a vehicle that delights them. Also, more than one-third of younger women (between the ages of 24 and 39) indicate that fuel efficiency is important, and nearly two-thirds want to buy environmentally-friendly vehicles. The Toyota Prius Hybrid

Other models that appeal to women, and that have hybrid powertrains and are reported by survey respondents to get at least 30 mpg, according to the APEAL Study, include the Toyota Camry Hybrid and Honda Civic Hybrid Sedan. Among non-hybrid gas sippers with conventional gasoline engines, the Toyota Yaris Sedan, Honda Fit and Toyota Corolla are mentioned. The Yaris and Fit tie as the top-ranked APEAL awardees in the sub-compact segment. It′s interesting to note that, seven years ago, fuel economy was not even on the list as one of the important factors in APEAL, according to our firm′s studies. In 2000, the top drivers in defining a pleasing vehicle for women owners were exterior styling and price, followed by durability and reliability.

What Does it Mean?

Major factors that affect women are based on logic and sensibility. They are most concerned about a model′s durability/reliability and interior comfort, and they also value vehicle workmanship, quality and fuel economy. Among models that receive very high percentage ratings based on each of the major purchase factors among women, many are APEAL segment award recipients.

June 22, 2007

Customer Service Basics: The Dealership

Since I began working at J.D. Power and Associates, I've become more observant of how consumers (including myself) are treated when buying products and services. Recently, I patronized a local BMW dealership, and the experience and service staff interaction provided some good and bad examples of customer service.

As my vehicle odometer crested the 15,799-mile mark, a dashboard light appeared, reminding me to schedule my first oil change and service. Because the car is filled with synthetic oil from the factory, service intervals are considerably longer than for cars using conventional motor oil, which means I can spend more time enjoying my car rather than visiting the dealership. After a few days of watching the reminder appear each time my car was started, I called the local dealership and scheduled a service appointment.

When I purchased my car, I was told that the dealership provides BMW loaner cars when vehicles are brought in for regularly-scheduled service. With this in mind I asked for a BMW loaner, but was surprised to hear: Those are booked up for weeks. I overlooked this unfulfilled promise (disappointment No.1) and agreed to bring my car in the following day. The dealership service advisor asked me if there were any other concerns with the vehicle. I told him about some problems with a sticking rear sunshade, a windshield washer fluid warning light, and a noisy retracting mirror on the passenger side.

The next day, when I arrived at the dealership to drop off my car, a friendly advisor reviewed my concerns and accurately diagnosed the cause of the low fluid warning light. The last time I filled the washer fluid, I failed to replace the cap, which had triggered the warning light. One problem solved in less than five minutes (surprise and delight No.1). I left the car for service, jumped into a rented MINI, courtesy of the dealership, and headed off to work.

Later that day, I called the dealership to find out when my car would be finished, but was surprised to learn that they had not worked on the car at all (disappointment No. 2). Trying to contain my frustration, I asked the advisor how this could have happened. Changing the oil and checking minor concerns should not take more than a day. She responded with excuses: Your technician was sick. The backup technician had too many jobs scheduled. We are very busy today. To say the least, I was less than interested in hearing excuses, but my verbal response was more politically correct.

Several hours later, I noticed a voice mail on my cell phone. It was another service advisor telling me she was taking over my account and that the car would definitely be ready the following day (surprise and delight No. 2). Around 3 p.m. the next day, the dealership called to say that the car was ready. I revved up the MINI and headed back to the dealership.

When my car was brought to the customer delivery area, I noticed a few things. Although the car had been washed, there were bird droppings on the hood. How could the service staff not notice this, especially on a clean white car? And while the interior appeared to have been vacuumed, a great deal of debris and dirt were still under the floor mats, which indicates that it was a rushed job (disappointment No. 3).

I asked the advisor about the rear sunshade and the noisy mirror because the paperwork showed that these features were working as designed. She said the technician had tried the sunshade a couple of times and could not replicate the problem. Fair enough, I thought to myself, as the problem occurred intermittently.

I took her to the car to listen to the side mirrors retract. One was silent, the other one was not. She explained that the BMW warranty only covers defects or things that are broken, and although noises are annoying, BMW will only reimburse the dealership for parts that are broken or have stopped working. Notwithstanding the paperwork, which indicated no defect found, her detailed explanation helped me understand the situation more clearly (surprise and delight No. 3).

Overall, the dealership satisfied my needs, even though there were a few rough spots throughout the process. The bottom line is that you should expect superior service wherever you go, and if you do not receive it, tell someone. Tell the person you are working with, such as the service advisor, or ask to speak to a manager. Well-run companies want to know when customers are disappointed so they can improve the level of service they provide. Similarly, if you receive exceptional service somewhere, tell the manager as I am sure they will appreciate the fact that you took the time to notice, and they will know that their employees are doing their job serving customers well.

June 19, 2007

Leaders of the Pack Benefit Automakers

There are nine models currently on the market whose sales performances demonstrate the rewards of leadership. These four cars and five trucks were the first (or nearly first) of their kind on the market and are leading their respective segments:

  • The Chevrolet Corvette, launched in 1953 as a 1954 model, was the first sports car offered by a domestic manufacturer. An American icon, Corvette is the top seller in the midsize premium sporty segment and outsells the runner-up Porsche 911 by more than two to one.
  • In 1964, Ford introduced the first low-priced sporty car—the Mustang—which has also become an American icon. Like the Corvette, the Mustang is a segment sales leader and outdistances its nearest rival, the Toyota Camry Solara coupe, by more than two to one. The recent success of the Mustang has forced GM and DaimlerChrysler to resurrect the Camaro and Challenger models, respectively—both of which will hit the market in the next two years.
  • A third car model that leads its field is the BMW 3 Series—one of the first luxury sport sedans available in the United States. The 3 Series is the perennial sales leader in the compact premium conventional segment, and currently outperforms its nearest competitor, the Infiniti G, by more than two to one. Today, most small premium conventional cars are trying to achieve the image and sales performance of the 3 Series.
  • The Toyota Prius hybrid compact first went on sale in 2000—seven months after the now-discontinued Honda Insight hybrid two-seater was introduced. The Prius has been—and continues to be—the hybrid sales leader, and has been a "halo" model for the Toyota franchise.
  • On the truck side, Ford was the first manufacturer to introduce a cargo carrier to the U.S. market with a version of the Model T in 1917 and, fittingly, the F-Series pickup has been the most popular truck and vehicle in the U.S. for several decades.
  • In 1935, Chevrolet introduced an enclosed carryall called the Suburban, and to this day that model outperforms its rivals, domestic and imported.
  • In the fall of 1983, the Chrysler Corporation launched the Dodge Caravan and Plymouth Voyager, creating the minivan segment. The Caravan has been the minivan sales leader ever since, and together the Caravan and Chrysler Town & Country now play a central role for the Chrysler Group. The two models account for 43% of midsize van deliveries this year to date—up more than 4 points from last year—according to the J.D. Power and Associates Sales Report.SM
  • In 1998, Lexus launched the RX Series, whose features "cross over" and combine the SUV and car categories. Although the RX was second to the luxury market with this concept, following the M-Class from Mercedes-Benz, the RX has led the luxury crossover field ever since its launch. Like the 3 Series, the RX is seen as the consummate model in its segment.
  • Lastly, Toyota was the first to enter the midsize crossover market with the Highlander, and the model continues to be the sales leader in the segment. A redesigned 2008 Highlander will soon arrive at dealerships, even though several major OEMs have yet to launch their first model in this category.

    In conclusion, leadership has its risks—including financial losses, sometimes embarrassment and loss of confidence—but it also has rewards, and the results described above illustrate how a model, brand and company can benefit in the long run from being out in front of the pack.



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