Those costly glitches and embarrassing hiccups that historically accompany new-model launches are becoming less frequent, says a J.D. Power and Associates researcher.
While it is “still largely true” that problems are associated with new-product introductions, auto makers are becoming more proficient because of improved manufacturing processes and accumulated experience, says Dave Sargent, the consultancy’s vice president-research.
“Some models still come out with quality challenges, but as a whole, OEMs are getting better at avoiding those,” he tells Ward’s as J.D. Power releases results of its inaugural Vehicle Launch Index.
The new index considers turn rates, vehicle revenue, dealer gross profit, incentive spend, credit quality and residual values to determining the overall success of a new-model launch. Results of the consultancy’s annual quality and consumer appeal surveys also are taken into account.
J.D. Power studied data associated with 27 ’08 and ’09 all-new or redesigned vehicles launched during the first 10 months of last year. The ’09Genesis sedan was judged to have the best launch with a score of 689.
The ’09F-150 pickup and the ’09 Tiguan cross/utility vehicle placed second and third with tallies of 673 and 663, respectively. The industry average was 582.
The ’09Matrix small car occupied the bottom ranking with a score of 439. The ’09 Dodge Ram pickup placed 26th with a tally of 459, while the ’09 Pontiac Vibe, which shares its platform with the Matrix, scored 504.
“It is more critical than ever for manufacturers to launch new models that meet their financial targets, as well as product quality and consumer-appeal benchmarks,” Gary Dilts, J.D. Power’s senior vice president-global automotive, says in a statement.
“Strong showings by new models are vital to the economic security of the auto makers and will be instrumental in rebuilding Americans’ confidence in the auto industry.”
Through June, confidence was clearly waning, according to Ward’s data. The seasonally adjusted annual rate of sales was 9.6 million, compared with prior-year’s 14.6 million.
“Most of the new models have had some type of incentive on them (in) cash back or financing specials,” notes Chintan Talati, spokesman for Edmunds. Inc., which tracks industry incentive programs.
Of the 12 vehicles that scored above the industry average in J.D. Power’s launch index, only the niche-market ’09 Dodge Challenger muscle coupe currently is sold without consumer rebates, low annual percentage-rate financing, lease incentives or dealer programs, according to Edmunds.
Michael Karesh, founder of vehicle-reliability tracker TrueDelta.com, is frequently at odds with J.D. Power. But he concurs with Sargent’s assessment of recent product introductions. The link between launch year and vehicle reliability is “less of a factor, but it’s still a big factor,” Karesh tells Ward’s.
Sargent says the Genesis’ launch performance reflects the acclaim the car has earned in other surveys. “Car of the Year” winner at this year’s North American International Auto Show, the Genesis has been credited with helping thebrand achieve a fourth-place finish in J.D. Power’s latest initial quality ranking, trailing only Lexus, Porsche and Cadillac.
“(Hyundai Motor Co. Ltd.) had a very good production plan,” Sargent says. “(Output) was pretty much in line with demand.”
However, he ratesMotor Co. and AG among the big launch index winners. In addition to placing vehicles in the top three of the survey, each auto maker has a second model that ranked above the industry average – the Ford Flex CUV and VW Passat CC, respectively.
“Any manufacturer that knows how to launch a vehicle well is going to see its market share grow over time,” Sargent says.
Through 2012, auto makers will have plenty of opportunity to prove their prowess as J.D. Power forecasts the U.S. market will see 205 new-model launches. Representing an investment of some $50 billion, the launches will comprise 80 entries that are new to the U.S., 73 major redesigns and 52 all-new vehicles.