J.D. Power Quality Survey Tracks Industry’s Progress

TOKYO – J.D. Power and Associates Initial Quality Study turns 30 this spring.

The study, along with evaluations by Consumer Reports magazine, has served as an industry benchmark for measuring quality since its inception in 1987. By increasing its quality standards and expanding markets it covers, it is likely to continue to exert influence.

In the first IQS Mercedes-Benz came in first, followed by Acura, Toyota, Honda and Porsche. Seven of the top 10 brands were Japanese, three were German.

“For the first 20-plus years of the study, Toyota (including Lexus) was the clear leader and everybody aspired to be where they were,” says Dave Sargent, vice president-global automotive operations for the Agoura Hills, CA-based consultancy.

Now it is the South Korean automakers that are setting the pace, although Sargent reports the Detroit Three also have made remarkable strides.

Kia ranked first in 2016, followed by Porsche and Hyundai. Chevrolet finished sixth, only 0.03 problems per vehicle behind Hyundai and 0.02 behind No.4 Toyota, with Buick and Lincoln tied for seventh, each 0.02 problem behind Chevrolet.

Moreover, the average number of problems per vehicle is one-third below 1987 levels, having fallen from 1.66 per vehicle to 1.05.

 “Overall right now, in terms of initial quality, Hyundai and Kia perform extremely well in almost every market,” Sargent tells WardsAuto. “They lead in the U.S. and are close to the top in China.

“Beyond that, there is a great deal of parity between the U.S. domestics, the Europeans and the Japanese. Some years the Japanese do a little better, some years the Europeans, some years the U.S. domestics. It’s constantly changing.”

One of the criticisms of the study is that it does not appear to adequately consider luxury-car owners’ higher quality expectations than those of mass-market owners.

In the 2016 report, Kia, Hyundai and Toyota outscored the higher-end BMW and Lexus marques. Chevrolet and Buick also outscored Lexus. Nissan outscored its own Infiniti luxury range. Nine mass-market brands registered higher scores than Audi, Mercedes and Cadillac.

“Over the years we’ve found no real advantage to being a luxury or non-luxury manufacturer,” Sargent says. “The differences are rather small when it gets down to basic quality.”

Nevertheless, the consultancy has addressed this problem by segmenting the study into 25 vehicle categories ranging from tiny city cars and small SUVs to heavy-duty pickups and premium sedans.

Another issue is that the study, which is published every June, does not account for differences between U.S. and home market-built cars of Japanese, Korean, German and other non-American brands. For instance, one cannot tell from the IQS ratings whether Hyundai’s South Korean plants are building better-quality cars than its U.S. plants.

An estimated 40% of Hyundai’s U.S. sales are imported from South Korea.

The study also does not differentiate between low- and high-volume models. Toyota’s Lexus SC 430 sports coupe placed No.1 in the 2005 survey. However, sales totaled only 8,360 units.

Moreover, the car was not even produced by Toyota but by then-subsidiary Kanto Auto Works at its Higashi-Fuji plant west of Tokyo.

That facility, incidentally, won J.D. Power’s gold plant award, meaning the consultancy deemed it the second-best auto plant in the world. Yet, only 10% of Kanto’s output were SC 430s. Most of the other 90% were midrange cars sold in Japan and not included in the J.D. Power study.

Toyota subsequently consolidated Kanto and other Northern Japanese operations into Toyota Motor East Japan.

The study has changed over the years. At the outset, it involved manually processing the results. Now, the survey is conducted online and, in 2016, involved more than 80,000 respondents comprising both owners and lessees.

At the outset, the study focused on mechanical issues such as engine and transmission problems, or structural flaws including squeaks and rattles or molding coming loose or falling off. Now, it focuses on the way customers think a feature should work. Voice recognition has emerged as a major problem along with audio and climate systems.

“It is much less about whether the car can physically get you from A to B and much more about how the car performs as it gets you from A to B,” explains Sargent, a specialist in competitor analysis before joining J.D. Power in 1992. “There are very few cars that break down on the side of the road these days.”

At the outset, the study was limited to 87 problem areas. It now covers 233. The consultancy generally updates content every seven years. The last major redesign was in 2013.

The study initially focused on the U.S. market. Now, quality studies also are conducted in Japan, China and Malaysia.

The consultancy conducts vehicle-dependability studies in Germany and Mexico. Launched in 1990, that report reviews quality after three years of ownership. The IQS covers the first 90 days.

J.D. Power initially focused on cars. In 1994, it added light trucks. It also has added suppliers of brakes, tires and seats and other components.

Looking ahead, Sargent says the challenge for his company, as well as for the industry, is the speed at which technology is being introduced, which in turn is creating challenges for consumers. “We need to keep pace with those changes,” he says.

Those changes include electrification. Sargent reports “early consumers of electric vehicles tend to be favorably disposed,” adding that the biggest criticisms are “not getting the range they thought they were going to get and that the heater consumes almost as much power as running the vehicle.

“Range is advertised as driving under ideal driving conditions,” he explains. “But nobody drives under ideal driving conditions. Nevertheless, for the most part, people who own EVs give them high scores.”

Another big challenge is market fragmentation, including different levels of autonomy – from vehicles that have no autonomous-driving capability to those which are fully autonomous, and everything in between.

“We include semi-autonomous features in the survey,” Sargent says. “Building blocks like lane-departure warning, lane-keep assist, intelligent-cruise control and automated braking. But we’re still some way away from having an autonomous vehicle.”

J.D. Power has found very few problems with these systems.

“Typically,” Sargent notes, “we receive complaints that (autonomous features are) not always predictable. Blindspot protection, for example. The consumer will claim that the warning went off yesterday but in the same situation today it didn’t.”

All of these developments “create problems for consumers to entangle,” Sargent says. “As we move increasingly toward car-sharing and ride-sharing and fewer people owning their own vehicle – this is still a long way off – it will change the dynamic of the industry.

“But for us, it creates lots of opportunities as an independent third party. Our primary mission will remain much the same – to understand what consumers are saying and relay that to the industry to help the industry and to satisfy consumers.”