Category: AutomotiveUnited States

Quality Takes a Back Seat to Innovation as Problems Reach a Record High, JD Power Finds

2023-06-22

jillian.breska

TROY, Mich.: 22 June 2023 — New vehicles are becoming more problematic, evidenced by the number of problems per 100 vehicles (PP100) rising a record 30 PP100 during the past two years. According to the JD Power 2023 U.S. Initial Quality Study^SM (IQS), released today, the rise in problems is 12 PP100 greater than in 2022, which follows an increase of 18 PP100 in 2022 from 2021. In 2023, the industry average is 192 PP100. A lower score reflects higher vehicle quality.

The continuing decline in quality can be attributed to multiple factors such as greater usage and penetration of technology; continued integration of known problematic audio systems into other new models; poor sounding horns; cupholders that don’t serve their purpose; and new models with 11 PP100 more than carryover models.

“The automotive industry is facing a wide range of quality problems, a phenomenon not seen in the 37-year history of the IQS,” said Frank Hanley, senior director of auto benchmarking at JD Power. “The industry is at a major crossroad and the path each manufacturer chooses is paramount for its future. From persistent problems carrying over from years past to an increase in new types of problems, today’s new vehicles are more complex—offering new and exciting technology—but not always satisfying owners.”

The U.S. Initial Quality Study, now in its 37th year, is based this year on responses from 93,380 purchasers and lessees of new 2023 model-year vehicles who were surveyed early in the ownership period. The study is based on a 223-question battery organized into nine vehicle categories: infotainment; features, controls and displays; exterior; driving assistance; interior; powertrain; seats; driving experience; and climate. The study is designed to provide manufacturers with information to facilitate the identification of problems and to drive product improvement. The study was fielded from February through May 2023.

While problems with driving experience are flat year over year, quality declines in all other categories. The largest year-over-year increase in the number of problems is in the features, controls and displays category (+3.2 PP100), followed by infotainment (+2.3 PP100).

Following are key findings of the 2023 study:

• Vehicle basic—door handles—are increasingly problematic: Opening a door was once a non-discussion point—an aspect of a vehicle that had been examined, engineered and mastered. The basic touch point of door handles is now a percolating problem area as manufacturers attempt to redesign them. Owners are having issues with high-tech approaches to this basic function; seven of the 10 most problematic models in this area are battery electric vehicles (BEVs).
• Safety systems causing problems: More than three-fourths (80%) of owners say their new vehicle includes all four of the primary driver assistance features—forward collision warning; lane keeping assistance; lane departure warning; and blind spot warning. However, problems owners encounter in the driver assistance category have increased 1.8 PP100 year over year. The most problematic areas are lane departure warning/lane keeping assistance (7.2 PP100) and forward collision warning/automatic emergency braking (5.0 PP100) for those that have these features.
• Owners increasingly happier with apps: Manufacturer smartphone apps improve 0.4 PP100 this year as the market penetration rate grows to 76%. BEV owners in particular use their app at least 68% of the time, primarily to monitor the charging process and to view their vehicle’s available range. The higher usage and unique BEV use cases translate to more problems experienced using the app in comparison to those with an internal combustion engine vehicle.
• Android Automotive Operating System (AAOS) issues: A 21.5 PP100 gap exists between vehicles that have an Android Automotive OS without Google Automotive Services (51.1 PP100) and those vehicles that don’t have this system (29.6 PP100). This is only for the operating system for in-vehicle infotainment, not for the smartphone mirroring systems of Android Auto or Apple CarPlay.
• Smartphone charging becomes most deteriorated problem: Across all 223 problems measured in the study, wireless charging pad not working properly has increased by a sizable 1.1 PP100 and is driven by both increased penetration and more usability issues with the technology. Users are experiencing several problems, including poor location; phone overheating; and intermittent charging, if at all. “This is the area where manufacturers really have the opportunity to delight customers with this convenience, but instead are creating a problem for them,” Hanley said.
• Biggest movers and shakers: Brands that show the largest year-over-year improvement are Maserati (73 PP100 improvement), Alfa Romeo (68 PP100 improvement) and Ram (45 PP100 improvement).     
• Unofficially ranked automakers fill bottom spots: Tesla Motors, with 257 PP100, increases 31 PP100 year over year, while Polestar (313 PP100) improves 15 PP100 year over year. Lucid Motors (340 PP100) and Rivian Motors (282 PP100) are included in the industry calculations for the first time but have too small a sample size to be award eligible. These automakers are not officially ranked amongst other brands in the study as they do not meet ranking criteria. Unlike other manufacturers, they do not grant JD Power permission to survey its owners in states where authorization is required. Nonetheless, a score was calculated based on a sample of surveys from owners in the other states.
   

Highest-Ranking Brands and Models
Dodge is the highest-ranking brand overall in initial quality with a score of 140 PP100. Among mass market brands, Ram (141 PP100) ranks second and Buick (162 PP100) ranks third.

Among premium brands, Alfa Romeo ranks highest with a score of 143 PP100. Porsche (167 PP100) ranks second and Cadillac (170 PP100) ranks third.

The parent corporation receiving the most model-level awards is General Motors Company (seven awards), followed by Hyundai Motor Group (five) and Toyota Motor Corporation (four). Among brands, Chevrolet and Kia receive the most segment awards (four).

• General Motors Company models that rank highest in their respective segments are Buick Encore GX, Cadillac Escalade, Cadillac XT6, Chevrolet Camaro, Chevrolet Corvette, Chevrolet Equinox and Chevrolet Tahoe.
• Hyundai Motor Group models that rank highest in their respective segments are Genesis G80, Kia Carnival, Kia Forte, Kia Rio and Kia Stinger.
• Toyota Motor Corporation models that rank highest in their respective segments are Lexus GX, Lexus IS, Toyota Camry and Toyota 4Runner.
• Nissan Motor Co., Ltd. has the highest-ranking model overall, the Nissan Maxima with 106 PP100, and the Nissan Murano ranks highest in its respective segment.
   

Plant Quality Awards
Toyota Motor Corporation’s Tahara Lexus, Japan, plant, which manufactures the Lexus IS, Lexus LS and Lexus NX, receives the Platinum Plant Quality Award. Plant quality awards are based solely on defects and malfunctions and exclude design-related problems.

General Motors Company’s plant in San Luis, Potosi, Mexico, which produces the Chevrolet Equinox and GMC Terrain, receives the Gold Plant Quality Award for North/South America. BMW AG’s plant in Born, Netherlands, which produces the MINI Cooper and MINI Countryman, receives the Gold Plant Quality Award for Europe and Africa.

For more information about the U.S. Initial Quality Study, visit https://www.jdpower.com/business/automotive/us-initial-quality-study-iqs.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

Double-Digit Sales Growth Continues for Third Consecutive Month As June New-Vehicle Sales Soar 22.6%; Q2 2023 Sales Rise 18.2%

2023-06-22

jillian.breska

The Total Sales Forecast

Total new-vehicle sales for June 2023, including retail and non-retail transactions, are projected to reach 1,381,200 units, a 22.6% increase from June 2022, according to a joint forecast from JD Power and GlobalData. June 2023 has 26 selling days, the same as June 2022.

New-vehicle total sales in Q2 2023 are projected to reach 4,116,600 units, an 18.2% increase from Q2 2022 on the same number of selling days.

New-vehicle total sales for the first half of 2023 are projected to reach 7,687,900 units, a 13.6% increase from the first half of 2022 on the same number of selling days.

The Retail Sales Forecast

New-vehicle retail sales for June 2023 are expected to increase when compared with June 2022. Retail sales of new vehicles this month are expected to reach 1,105,300 units, a 16.6% increase from June 2022.

New-vehicle retail sales in Q2 2023 are projected to reach 3,292,900 units, an 11.2% increase from Q2 2022 on the same number of selling days.

New-vehicle retail sales for the first six months 2023 are projected to reach 6,161,400 units, a 6.0% increase from the first six months of 2022 on the same number of selling days.

The Takeaways

Thomas King, president of the data and analytics division at JD Power:
“The 2023 theme of strong sales growth, enabled by increased vehicle production and pent-up demand, is continuing in June. On a volume basis, June year-to-date total sales will be just more than 7.6 million units—an increase of 13.6%—but still below pre-pandemic sales levels which were north of 8 million. Volume growth is being complemented by further increases in transaction prices which are trending towards being up 3% for the first half of 2023 despite increases in OEM incentives and declines in dealer grosses. As a result, it’s anticipated that consumers will spend nearly $281.4 billion on the purchase of new vehicles in the first half of 2023, a noteworthy 8% growth from the same period a year ago.

“Retail inventory levels in June are expected to finish at just more than 1.2 million units, remaining consistent with most months this year. This represents a 16.6% increase from May 2023 and a substantial increase of 45% compared with June 2022, but well below historical levels.

“Sales to fleet customers are rising faster as manufacturers leverage higher vehicle production to allocate more vehicles to those fleet customers. Fleet sales are projected to increase 54.5% from June 2022.

“The increased vehicle supply and elevated interest rates have led to a decline in dealer profits—but those profits still exceed pre-pandemic levels. The total retailer profit per unit—which includes grosses, finance and insurance income—is expected to reach $3,692 in June. While this is 26.7% lower than a year ago, it is still more than double the amount in June 2019. The primary reason for the decline in profit is that fewer vehicles are being sold for prices higher than the manufacturer’s suggested retail price (MSRP). This month, only 30% of new vehicles are projected to be sold above MSRP, which is down from a high of 49% in July 2022.”

Total aggregate retailer profit from new-vehicle sales for this month is projected to be down 16.2% from June 2022, reaching $3.8 billion for the third-highest June on record.

“Retailers are still actively promoting and selling vehicles before they physically arrive at the dealership. However, with increased inventory levels, more consumers are now able to purchase vehicles from inventory. In June, 46% of vehicles are projected to be sold within 10 days of their arrival at the dealership, which is down from the peak of 57% in March 2022. The average time that a new vehicle spends in the dealer’s possession before being sold is expected to be 28 days, up from 18 days a year ago, but still less than half the pre-pandemic average of 70 days.

“Manufacturer discounts in June have remained relatively consistent compared with May but have increased materially from a year ago. The average incentive spend per vehicle has risen 95.9% from June 2022 and is currently on track to reach $1,798. Expressed as a percentage of MSRP, incentive spending is currently trending at 3.7%, an increase of 1.7 percentage points from June 2022. A key factor influencing the relatively lower incentives compared to historical levels is the decreased amount of discounts provided for leased vehicles. However, it is noteworthy that discounts on leased vehicles have risen in recent months. This month, leasing is expected to account for 21% of retail sales, up significantly from the low of 16% in September  2022, but still well below June 2019 when leased vehicles made up nearly 30% of all new-vehicle retail sales.

“Elevated pricing coupled with interest rate increases continue to inflate monthly loan payments. The average monthly finance payment in June is on pace to be $726, up $27 from June 2022. That translates to a 3.9% increase in monthly payments from a year ago. The average interest rate for new-vehicle loans is expected to be 7.0%, an increase of 194 basis points from a year ago.

“Used-vehicle prices have declined slightly from a year ago but remain close to all-time highs.  The average trade-in equity for June is trending toward $9,979, down $78 from a year ago, the highest trade-in equity recorded. For context, trade equity this month is still more than double the pre-pandemic level, helping owners offset some of the pricing and interest rate increases.

“In the coming months, the industry may face challenges such as higher interest rates and changing economic conditions. Despite the potential effect of these economic risks, the industry will continue to benefit from pent-up demand for new vehicles. As new-vehicle availability gradually improves, there will be an easing of the current record levels of pricing and profitability as manufacturer incentives gradually increase and retailer profit margins gradually fall. Nevertheless, this will be offset to some extent by an increase in overall sales volumes.”

Sales & SAAR Comparison

U.S. New Vehicle	June 20231, 2	May 2023	June 2022
Retail Sales	1,105,299 units (16.6% higher than June 2022)2	1,092,390 units	948,314 units
Total Sales	1,381,190 units (22.6% higher than June 2022)2	1,368,440 units	1,126,863 units
Retail SAAR	12.8 million units	12.2 million units	10.9 million units
Total SAAR	15.8 million units	15.1 million units	12.9 million units

¹ Figures cited for Jun 2023 are forecasted based on the first 15 selling days of the month.
² Jun 2023 has 26 selling days, the same as June 2022.

The Details

• The average new-vehicle retail transaction price in June is expected to reach $45,978, flat from June 2022. The previous high for any month—$47,362—was set in December 2022.
• Average incentive spending per unit in June is expected to reach $1,798, up from $918 in June 2022. Spending as a percentage of the average MSRP is expected to increase to 3.7%, up 1.7 percentage points from June 2022.
• Average incentive spending per unit on trucks/SUVs in June is expected to be $1,649, up $949 from a year ago, while the average spending on cars is expected to be $1,393, up $597 from a year ago.
• Retail buyers are on pace to spend $47.9 billion on new vehicles, up $6 billion from June 2022.
• Truck/SUVs are on pace to account for 77.7% of new-vehicle retail sales in June.
• Fleet sales are expected to total 275,900 units in June, up 54.5% from June 2022 on a selling day adjusted basis. Fleet volume is expected to account for 20% of total light-vehicle sales, up from 16% a year ago.
• Average interest rates for new-vehicle loans are expected to increase to 7.0%, 194 basis points higher than a year ago.

 

EV Outlook

Elizabeth Krear, vice president, electric vehicle practice at JD Power:
“There have been sizable shifts this year—up and down—in the individual factors of the JD Power EV Index, revealing vulnerability in the transition from gas-powered vehicles to EVs. The three factors of interest, availability and affordability have increased, but the other three factors of adoption, infrastructure and experience have declined. The EV Index score of 49—on a 100-point scale—remains unchanged, and that might be concerning to some in the industry.

“EVs from perennial mass-market brands continue to yield high interest upon introduction, including the Honda Prologue, which debuted in May as the most-considered EV. As the industry waits for new product, monthly price mix dynamics are at play at vehicle trim levels. Driven by the Inflation Reduction Act, pricing adjustments and model mix, the affordability factor increased notably to 94 in April 2023 from 82 in December 2022. Pricing improvements increase affordability across a variety of models, including Tesla’s with price cuts.

“With Tesla charging network collaborations on the horizon, Ford, GM and Rivian buyers will benefit. However, charging installation growth continues to lag the growth of EVs on the road, further straining already-limited infrastructure. One of the top reasons rejecters say they’re not likely to purchase an EV is range. Among Compact SUVs, EV ranges are just 65% of gas-powered counterparts—but EV owners say that’s nearly sufficient for them to not change their driving behaviors—another advantage for the Tesla, Ford, GM and Rivian alliance.”

Global Sales Outlook

Jeff Schuster, group head and executive vice president, automotive at GlobalData:
“The global recovery accelerated in May with the selling rate hitting 89.0 million units, 13.2 million higher than May 2022. Volume was up 19% for the same period to 7.4 million units.  Most markets have outperformed 2022 when they were hampered by severe supply constraints, that have started to ease. Leading the year-over-year growth were China (up 26%), Japan (up 25%) and North America (up 22%). Europe was up 19% and Russia’s sales were nearly 2.5 times the volume of May 2022.

“June’s selling rate is expected to remain elevated at 88.0 million units, but global light-vehicle volume is expected to increase just 4% from June 2022, which was relatively strong. Most markets will continue to grow, including Japan (up 21%), North America (up 19%) and South America (up 20%). China is expected to contract 14%, the major factor behind a weaker global growth rate.

“May outperformed expectations resulting in a slight increase to the overall outlook for global light-vehicle sales in 2023. The current forecast is up 200,000 units from last month to 86.3 million units, an increase of 7%. Unfulfilled global demand is estimated at 3.5-4 million units, so the market is still not at equilibrium. We remain cautiously optimistic about the remainder of 2023, given the current positive momentum. However, risk remains elevated and even as supply disruption eases, other risks emerge such as rail car shortages in the United States. The outlook for 2024 global light-vehicle sales remains stable at 90.3 million units, an increase of nearly 5% from 2023.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info

About GlobalData www.lmc-auto.com

 

Satisfaction with Websites is Volatile but Automotive Manufacturer Websites Shine, JD Power Finds

2023-07-18

jillian.breska

TROY, Mich.: 18 July 2023 — Overall satisfaction with automotive manufacturer websites has been steadily increasing since 2022, according to the JD Power 2023 U.S. Manufacturer Website Evaluation Study^SM —Summer, released today. Specifically, satisfaction is 724 (on a 1,000-point scale) in the premium segment, up 2 points from the 2023 MWES—Winter and up 13 points from the 2022 MWES—Summer. Satisfaction in the mass market segment is 713, up 5 points from the 2023 MWES—Winter and up 8 points from the 2022 MWES—Summer.

“Website satisfaction can be volatile and automotive websites are not immune to changing preferences,” said Jon Sundberg, director of digital solutions at JD Power. “However, manufacturers have shown to be very agile when it comes to website design and ensuring their sites meet modern standards, more so than many other industries, as exemplified through the study data.”

The JD Power U.S. Manufacturer Website Evaluation Study is a semiannual study that measures customer satisfaction of automotive manufacturer websites during the process of shopping for a new vehicle by examining four key measures (in order of importance): information/content; visual appeal; navigation; and speed.

Study Rankings

Alfa Romeo ranks highest among premium manufacturer websites with a score of 755. BMW (749) ranks second and Infiniti (745) ranks third.

Ram ranks highest among mass market manufacturer websites with a score of 735. GMC (729) ranks second and Jeep (728) ranks third.

The U.S. Manufacturer Website Evaluation Study, initially released in 1999, is based on responses from 10,202 new-vehicle shoppers who indicate they will be in the market for a new vehicle within the next 24 months. The study was fielded in April-May 2023.

For more information about the U.S. Manufacturer Website Evaluation Study, visit https://www.jdpower.com/business/resource/us-manufacturer-website-evaluation-study

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: http://www.jdpower.com/business/about-us/press-release-info

 

Owners Unimpressed with New-Vehicle Design and Performance, JD Power Finds

2023-07-18

jillian.breska

TROY, Mich.: 20 July 2023 — Vehicle manufacturers may be collectively disappointed learning that, for the first time in the 28-year history of the JD Power U.S. Automotive Performance, Execution and Layout (APEAL) Study,^SM there is a consecutive year-over-year decline in owner satisfaction. According to the 2023 study, released today, overall satisfaction is 845 (on a 1,000-point scale), a decrease of 2 points from a year ago and 3 points lower than in 2021.

“The decline in consecutive years might look small, but it’s an indicator that larger issues may lie under the surface,” said Frank Hanley, senior director of auto benchmarking at JD Power. “Despite the technology and design innovations that manufacturers put into new vehicles, owners are lukewarm about them. While innovations like charging pads, vehicle apps and advanced audio features should enhance an owner’s experience, this is not the case when problems are experienced. This downward trajectory of satisfaction should be a warning sign to manufacturers that they need to better understand what owners really want in their new vehicles.”

The study is based on 10 factors—nine of which have declined year over year. The only factor to improve is fuel economy (771), which is 15 points higher than in 2022. The factor with the largest year-over-year decline is exterior, decreasing to 888 from 894. Satisfaction with exterior styling on new models in 2023 is particularly unremarkable, scoring only 3 points above carryover models.

Built-in infotainment systems are a prime example of a technology not resonating with today’s buyers. Only 56% of owners prefer to use their vehicle’s built-in system to play audio, down from 70% in 2020. Three of the most common uses for built-in systems are: owners looking to make phone calls; voice recognition; and navigation—with less than half (45%, 37% and 43%, respectively) of owners preferring to use their vehicle’s built-in system for these functions.

The APEAL Study complements the JD Power U.S. Initial Quality Study^SM (IQS) and the JD Power U.S. Tech Experience Index (TXI) Study^SM by measuring owners’ emotional attachment and level of excitement with their new vehicle. The APEAL Study asks owners to consider 37 attributes, ranging from the sense of comfort they feel when climbing into the driver’s seat to their exhilaration when they step on the accelerator. Vehicle owners’ responses to queries about these attributes are aggregated to compute an overall APEAL Index score.

Following are key findings of the 2023 study:

• Both premium and mass market segments decrease in overall satisfaction: Year over year, satisfaction declines 4 points among mass market brands and 1 point among premium brands. The gap in satisfaction between the two segments widens to 34 points this year.
• Android Automotive Operating System (AAOS) with GAS delights owners: Models that have AAOS with Google Automotive Services (GAS) score higher in the infotainment category than those with no AAOS whatsoever. AAOS without GAS receives the lowest scores for infotainment of the three categories. 
• Satisfaction with fuel economy better among BEVs than gas-powered vehicles: For a second consecutive year, battery electric vehicles (BEVs) outperform internal combustion engine (ICE) vehicle counterparts in fuel economy, the only factor showing improvement in this year’s study. Even with gas prices declining, the large gap in satisfaction continues between ICE vehicles (758) and BEVs (797) for fuel economy/range scores.
• Electrified vehicles close APEAL gap with gas vehicles: The overall APEAL Index score for gasoline-powered vehicles is 843, tied with plug-in hybrids. In comparison, BEVs (excluding Tesla) increased 2 points year over year to 840 and have closed the gap in satisfaction with gas-powered vehicles to 3 points. Tesla vehicles are summarized separately due to their high weight in the BEV segment. It is notable that certain attributes of Tesla models continue to outperform other BEVs, though there are challengers emerging from traditional manufacturers, including five BEV models that receive segment awards.
• Satisfaction with Tesla declines: Tesla, with a score of 878, remains one of the higher performing brands in the industry. However, the score in 2023 is 9 points lower than a year ago when Tesla was first included in the study. Satisfaction scores for Tesla have declined year over year in all 10 factors. Because Tesla does not allow JD Power access to owner information in the states where that permission is required by law, Tesla models remain ineligible for awards.

Highest-Ranking Brands

Jaguar ranks highest among premium brands with a score of 887. Land Rover (883) and Porsche (883) rank second in a tie, while BMW (878) ranks fourth.

Dodge ranks highest among mass market brands for a fourth consecutive year, with a score of 887. Ram (873) ranks second and GMC (858) ranks third.

Model-Level APEAL Awards

Setting a record for the most model-level awards (for models ranking highest in their respective segments) is Hyundai Motor Group (nine awards), followed by BMW AG (five awards) and Toyota Motor Corporation (three awards).

The complete list of award recipients is:

• Hyundai Motor Group: Genesis GV60, Hyundai Santa Cruz, Kia Carnival, Kia EV6, Kia Forte, Kia K5, Kia Rio, Kia Stinger and Kia Telluride
• BMW AG: BMW 7 Series, BMW X4, BMW iX, MINI Cooper and MINI Countryman
• Toyota Motor Corporation: Lexus IS, Lexus RX and Toyota Sequoia
• Nissan Motor Co., Ltd.: Nissan Ariya and Nissan Titan
• Volkswagen AG: Porsche 911 and Porsche Taycan
• Stellantis NV: Dodge Challenger
• Mercedes-Benz Group AG: Mercedes-Benz CLA
• General Motors Company: Chevrolet Blazer
• Jaguar Land Rover Limited: Land Rover Range Rover

The Porsche 911 is the highest-ranking individual model (914). Kia sets a record for most brand awards in a single year with seven. The Kia K5 receives a model-level award for a third consecutive year.

The 2023 U.S. APEAL Study is based on responses from 84,555 owners of new 2023 model-year vehicles who were surveyed after 90 days of ownership. The study was fielded from February through May 2023, based on vehicles registered from November 2022 through February 2023.

For more information about the U.S. APEAL Study, visit  https://www.jdpower.com/business/automotive/us-automotive-performance-execution-and-layout-apeal-study.

See the online press release at http://www.jdpower.com/pr-id/2023075.

About JD Power

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

JD Power Teams with Palantir to Create Unique Solutions for the Automotive Industry

2023-07-24

jillian.breska

TROY, Mich., and DENVER: 25 July 2023 — In an industry-first collaboration that is intended to transform the way automakers, dealers, insurers and financing companies leverage data-driven insights, JD Power, a data and analytics company that analyzes more than 20 million vehicle transactions per year and has collected billions of vehicle configuration and performance datapoints, today announced a collaboration with Palantir Technologies Inc., (NYSE: PLTR) (“Palantir”) to develop generative artificial intelligence (AI) and predictive analytics solutions that will facilitate deeper insights and more strategic decision making by the automotive industry.

JD Power will leverage Palantir Foundry and AIP to help integrate its industry-leading automotive datasets, including incentives, retail sales, valuations, vehicle configuration, service and warranty, new and used inventory, and automobile customer experience data to support the development of new analytics models and workflow solutions which will help address some of the auto industry’s toughest issues. These combined capabilities will also help facilitate collaboration between automakers and industry regulators as new technologies such as electrification and autonomous driving become more widely adopted.

“This breakthrough collaboration will fundamentally transform the way the auto industry analyzes its performance and optimizes its go-to-market strategy and product offerings by pairing the world’s most robust automotive databases with the most powerful analytics platforms,” said Dave Habiger, JD Power president and CEO. “As a result of our work with Palantir, our clients are now able to create unique insights that were previously impossible.”

Together, JD Power and Palantir are making it possible for auto industry customers, including OEMs, suppliers, dealers, financing companies and insurers, to rapidly scale the development of new AI-driven solutions drawing on the industry’s most trusted and authoritative datasets. Several auto manufacturers have already integrated the platform into their strategic planning processes.

Additional solutions already developed leveraging JD Power data on Palantir Foundry include the following:

• Repair Analytics: JD Power and Palantir have developed a repair analytics application that monitors warranty costs and automatically flags areas in need of further attention to give auto OEMs and dealers a proactive means of predicting and managing vehicle repair costs.
• Intelligent Alerts: The newly developed intelligent alert system tracks vehicle-specific sales activity, competitive dynamics and macroeconomic trends, allowing OEMs, dealers and financing companies to optimize their incentive strategies based on real-time, hyperlocal data.
• EV Battery Health Analytics: A new electric vehicle (EV) battery health monitoring application analyzes battery health in large fleets and delivers insights and data that can be used for quality and performance improvement management.
• Digital Journey Optimization: A data hub that combines auto OEM customer engagement data with JD Power pricing and satisfaction insights enabling auto OEMs and dealers to target shoppers and owners in the optimal channel with a personalized message.

“The automotive industry is at a critical inflection point as AI and other forces continue to transform the industry,” said Alexander Karp, Co-Founder and CEO of Palantir. “JD Power sets itself apart as a pioneer in data-driven intelligence and delivering lasting value for its customers.”

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

About Palantir Technologies Inc.
Foundational software of tomorrow. Delivered today. Additional information is available at https://www.palantir.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Lisa Gordon, Palantir; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

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Forward-Looking Statements
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New-Vehicle Sales Poised to Surge 9.8% This Month; Transaction Prices Expected to Set Record for Month of April

2023-04-26

jillian.breska

The Total Sales Forecast

Total new-vehicle sales for April 2023, including retail and non-retail transactions, are projected to reach 1,316,500 units, a 9.8% increase from April 2022, according to a joint forecast from JD Power and LMC Automotive. April 2023 has 26 selling days, one fewer than April 2022. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 5.7% from 2022.

The Retail Sales Forecast

New-vehicle retail sales for April 2023 are expected to increase when compared with April 2022. Retail sales of new vehicles this month are expected to reach 1,087,400 units, a 5.9% increase from April 2022. Comparing the sales volume without adjusting for the number of selling days translates to an increase of 2.0% from 2022.

The Takeaways

Thomas King, president of the data and analytics division at JD Power:
“The industry is poised for another favorable month in April, with projected retail sales expected to increase 5.9%, accompanied by a 2% increase in average transaction prices. Consequently, it’s expected that consumers will spend nearly $47.5 billion on new vehicles this month, reflecting 2.9% growth compared with the same month a year ago.

“It is anticipated that retail inventory levels for April will reach approximately 1.2 million units, which is consistent with March but marks a substantial 45% increase from April 2022. With the significant improvement in overall new-vehicle availability from a year ago, dealer margins are declining and manufacturer incentive spending is increasing. Nevertheless, the demand for vehicles in the retail market remains strong due to pent-up demand from pandemic-related production shortages.

“Overall, the retail sales pace continues to be supply constrained. Therefore, pricing and profitability remain well above historical levels. This market condition is being sustained by manufacturers allocating more production volume to fleet sales. Rather than allocating all incremental production to retailers, manufacturers are opting to sell more vehicles to fleet customers, with fleet sales projected to increase 33% vs. April 2022.”

New-vehicle transaction prices continue to rise, with the average price reaching an April record of $46,044. This is a 2.0% increase from a year ago. The record transaction prices means that consumers are on track to spend nearly $47.5 billion on new vehicles this month—the second highest for the month of April and 2.9% higher than April 2022.

The improved supply of vehicles compared with a year ago has resulted in a decline in dealer profits. However, dealer profits remain well above pre-pandemic levels. The total retailer profit per unit, which includes grosses and finance and insurance income, is expected to reach $3,755. While this is 24.5% lower than a year ago, it is still more than double the amount of April 2019. The primary reason for the decline in profit is that fewer vehicles are being sold for prices higher than the manufacturer’s suggested retail price (MSRP). This month, only 32% of new vehicles are projected to be sold above MSRP, which is down from a high of 48% in July 2022.

Total aggregate retailer profit from new-vehicle sales for the month of April is projected to be down 23.8% from April 2022, reaching $3.9 billion for the second-highest April on record.

Retailers continue to engage in significant pre-selling of their inventory, however due to higher inventory levels, more consumers are buying vehicles that are currently on the lot. In April, 44% of vehicles are projected to be sold within ten days of their arrival at the dealership, which is down from the peak of 57% in March of last year. The average time that a new vehicle spends in the dealer’s possession before being sold is expected to be 30 days, up from 18 days last year, but still less than half the pre-pandemic average of 70 days.

Manufacturer discounts have remained relatively consistent compared to March but have increased materially from a year ago. The average incentive spend per vehicle has risen 58.9% from April 2022 and is currently on track to reach $1,599. The percentage of incentive spending per vehicle in relation to the average MSRP is currently trending at 3.3%, an increase of 1.1 percentage points from April 2022. One of the factors contributing to this low level of spending is the absence of discounts on leased vehicles. This month, leasing is expected to account for only 19% of retail sales, whereas in April 2019, leased vehicles made up nearly 30% of all new-vehicle retail sales.

“Elevated pricing coupled with interest rate increases continue to inflate monthly loan payments. The average monthly finance payment in April is on pace to be $729, up $48 from April 2022. That translates to a 7.1% increase in monthly payments from a year ago. The average interest rate for new-vehicle loans is expected to be 6.8%, an increase of 227 basis points from a year ago.

“Used-vehicle prices have fallen which is resulting in less trade-in equity for new-vehicle buyers who have a vehicle to trade. The average trade-in equity for April is trending toward $9,162, down $363 from a year ago, and down $908 since the peak in June 2022. For context, April 2023 trade equity is still more than double the pre-pandemic level, helping owners that have a vehicle to trade in offset some of the pricing and interest rate increases.

“As we look to May, the asymmetrical market positions of each manufacturer could become more apparent. Brands with higher inventory levels may participate in the tradition of Memorial Day promotions and discounts to generate sales, while other brands that are still struggling with production will have to decide whether or not to compete on price. The disparity in inventory may result in unbalanced year-over-year sales results among manufacturers. Despite these challenges, including elevated interest rates, consumer demand has demonstrated remarkable resilience. Therefore, we can anticipate that manufacturers and retailers will continue to benefit from historically high profitability on the vehicles they sell.”

Sales & SAAR Comparison

U.S. New Vehicle	April 20231, 2	March 2023	April 2022
Retail Sales	1,087,364 units (5.9% higher than April 2022)2	1,100,546 units	1,066,548 units
Total Sales	1,316,464 units (9.8% higher than April 2022)2	1,361,041 units	1,254,084 units
Retail SAAR	13.3 million units	12.0 million units	12.7 million units
Total SAAR	15.5 million units	14.7 million units	14.4 million units

¹ Figures cited for April 2023 are forecasted based on the first 19 selling days of the month.
² April 2023 has 26 selling days, one fewer than April 2022.

The Details

• The average new-vehicle retail transaction price in April is expected to reach $46,044, a 2.0% increase from April 2022. The previous high for any month—$47,362—was set in December 2022.
• Average incentive spending per unit in April is expected to reach $1,559, up from $1,007 in April 2022. Spending as a percentage of the average MSRP is expected to increase to 3.3%, up 1.1 percentage points from April 2022.
• Average incentive spending per unit on trucks/SUVs in April is expected to be $1,673, up $644 from a year ago, while the average spending on cars is expected to be $1,328, up $404 from a year ago.
• Retail buyers are on pace to spend $47.5 billion on new vehicles, up $1.3 billion from April 2022.
• Truck/SUVs are on pace to account for 78.0% of new-vehicle retail sales in April.
• Fleet sales are expected to total 229,100 units in April, up 33.3% from April 2022 on a selling day adjusted basis. Fleet volume is expected to account for 17% of total light-vehicle sales, up from 14% a year ago.
• Average interest rates for new-vehicle loans are expected to increase to 6.85%, 227 basis points higher than a year ago.

EV Outlook

Elizabeth Krear, vice president, electric vehicle practice at JD Power:
“While EV market share has improved from 2.5% in March 2020 to 7.3% in March 2023, it’s important to note that the latter figure is down from 8.5% in February 2023. Despite an improvement in the Affordability factor score of the JD Power EV Index, the slippage in Adoption and in Infrastructure means that the parity of EVs to gas-powered vehicles is flat. Our March data shows that 21% of new-vehicle shoppers are ‘very unlikely’ to consider an EV for their next purchase—the highest percentage we’ve seen. Nearly half of those shoppers—49%—cite lack of charging stations as a key reason why.

“As tax credits make their way to consumers, the Affordability factor for March is 91—the first time the score has exceeded 90 since May 2022. The high will be short-lived as the effect of new IRA battery eligibility requirements becomes evident in EV Index results in the coming months. The new requirements mean fewer vehicles are eligible for Clean Vehicle Credit and, among those retaining eligibility, many see a decline in applicable amount.”

Global Sales Outlook

Jeff Schuster, group head and executive vice president, automotive at GlobalData, parent of LMC Automotive:
“Global light-vehicle sales ended the first quarter up 4.4% year over year to 20.6 million units, driven by recovery growth. Growth of battery electric vehicles accelerated 31.4% in the first quarter, while volume of gas-powered vehicles fell 3.2%. March’s selling rate increased to 84 million units from 81 million units in February. March volume was up 10.6% year over year to 8.1 million units, driven by strong volume growth in Brazil (+37.9%), Western Europe (+22.6%) and Korea (+21.3%). North America and China grew slightly less than the global market, but both markets exceeded expectations going into the month.

“Global light-vehicle sales in April are expected to increase 23.5% to 6.8 million units with the growth coming from a low base in April 2022. The selling rate is forecast to increase to 84.9 million units from 67.9 million last April. Growth in China is an outlier at a projected increase of 90% from being locked down in April 2022. Solid growth continues in Europe, up 21.5%, as markets start to rebound from supply disruption and the effect of the war in Ukraine.

“As the recovery continues and production levels rise to fuel stronger demand, we are holding the forecast consistent with last month at 86 million units, a 6.2% increase from 2022. Supply disruption is projected to improve further but will remain an issue throughout 2023. The overall effect on underlying demand is expected to be 4 million units of disruption, half what it was in 2022.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info

About LMC Automotive www.lmc-auto.com

 

Vehicle Owners Express Lower Satisfaction with Aftermarket Service Providers, JD Power Finds

2023-04-28

jillian.breska

TROY, Mich.: 2 May 2023 — According to the JD Power 2023 U.S. Aftermarket Service Index (ASI) Study,^SM released today, overall satisfaction declines year over year in the three segments that comprise the study (based on a 1,000-point scale): quick oil change (-18 points); full-service maintenance and repair (-7); and tire replacement (-6). Customer satisfaction is lower for the performance of the service advisor, specifically noting increased wait times, and fewer advisors providing helpful advice. There is also lower satisfaction with service advisor courtesy. 

A detailed look at the drivers of satisfaction in each segment reveals that satisfaction with quick oil change declines in all seven measures, with the largest decline in service facility (-22); satisfaction with full-service maintenance and repair declining in six of seven measures, with satisfaction only improving in ease of scheduling (+3); and tire and replacement declining in six of seven measures, with satisfaction improving only with time to complete service (+1).

“Independent service providers must remain focused on retaining their customer base,” said Leonard Martin, director of automotive retail at JD Power. “Aftermarket service facilities can increase customer loyalty and revenue by taking advantage of what they do best—being easier to do business with. Convenience, speed and price are very attractive to today’s vehicle owners who are looking for excellent service, and aftermarket service providers can leverage those factors to stem the tide of owners going to dealerships.” 

The study, now in its fourth year, measures customer satisfaction with aftermarket service facilities, providing a numerical index ranking of the highest-performing facilities in the U.S. aftermarket. Performance in three segments—full-service maintenance and repair; quick oil change; and tire replacement—is based on the combined scores for seven measures that comprise the vehicle owner service experience. These measures are (in alphabetical order): ease of scheduling/getting vehicle in for service; fairness of charges; service advisor courtesy; service advisor performance; service facility; time to complete service; and quality of work.

Following are key findings of the 2023 study:

• Aftermarket service providers’ customer advocacy keeps up with dealers: The Net Promoter Scores^®1 (NPS) of independent service providers are competitive with those of franchised dealerships when comparing service visits for model-year 2020-2023 vehicles included in the 2023 ASI and the JD Power 2023 U.S. Customer Service Index (CSI) Study.^SM Independent service providers have an NPS score of 54 for full-service maintenance and repair, while dealerships have a score of 51. The NPS scores for tire replacement are 57 among dealerships and 56 among independent tire stores. NPS scores for oil changes are 54 for dealerships and 47 for quick oil change providers.      
• Quick and easy facility fixes that improve satisfaction: Improving satisfaction at independent service centers can be as simple as providing complimentary snacks or electrical power for customers’ electronic devices. The three amenities that have the largest effect on satisfaction are offered less than 15% of the time. Service facility satisfaction is 825 when complimentary snacks/beverages are offered, a 91-point increase vs. when they are not (734). Similarly, facility satisfaction is 81 points higher when providers make a device charging station available than when this amenity is not offered (735). Giving customers a workspace to plug in computers is another easy way to boost satisfaction yet is currently provided only 7% of the time.
• Aftermarket service providers can get a revenue jolt: The ever-increasing electric vehicle (EV) marketplace service needs and shorter length of service intervals is creating an opportunity for aftermarket service providers. The study finds that tire repair and replacement needs for EVs trend much higher than the industry average for internal combustion engine (ICE) vehicles. The types of work being done at a higher rate on EVs than the industry average include tire maintenance (49% vs. 28%, respectively); tire repair (41% vs. 12%, respectively); and tire replacement (34% vs. 21%, respectively). “Aftermarket service providers can benefit from an increase in tire replacement and repair business as automakers offer more EVs,” Martin said. “The heavier EV weight due to batteries coupled with the instant torque results in more tire wear and tear, which is an opportunity for the aftermarket industry.”

Study Rankings

Christian Brothers Automotive Corp. ranks highest in satisfaction for full-service maintenance and repair for a fourth consecutive time, with a score of 834. Meineke Car Care Centers (806) ranks second and Goodyear Auto Service (804) ranks third.

Express Oil Change and Tire Engineers ranks highest in satisfaction for quick oil change with a score of 843. Take 5 (815) ranks second and Valvoline Instant Oil Change (803) ranks third.

Goodyear Auto Service ranks highest in satisfaction for tire replacement with a score of 840. Discount Tire ranks second (835) and Jiffy Lube (832) ranks third.

The 2023 U.S. Aftermarket Service Index (ASI) Study is based on responses from 11,194 vehicle owners. Survey data collection was conducted online from January through March 2023. Survey respondents were initially selected from online consumer panels. Respondents were screened for having aftermarket service performed in the past 12 months.

For more information about the U.S. Aftermarket Service Index (ASI) Study, visit https://www.jdpower.com/business/automotive/us-aftermarket-service-index-asi-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

¹Net Promoter,® Net Promoter System,® Net Promoter Score,® NPS,® and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

 

May 2023 New-Vehicle Sales to Surge 15.6% Year Over Year As New-Vehicle Expenditures Grow 13% in Same Period

2023-05-25

jillian.breska

The Total Sales Forecast

Total new-vehicle sales for May 2023, including retail and non-retail transactions, are projected to reach 1,337,700 units, a 15.6% increase from May 2022, according to a joint forecast from JD Power and LMC Automotive. May 2023 has 25 selling days, one more than May 2022. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 20.4% from 2022.

The Retail Sales Forecast

New-vehicle retail sales for May 2023 are expected to increase when compared with May 2022. Retail sales of new vehicles this month are expected to reach 1,079,200 units, a 9.6% increase from May 2022. Comparing the sales volume without adjusting for the number of selling days translates to an increase of 14.2% from 2022.

The Takeaways

Thomas King, president of the data and analytics division at JD Power:
“The industry is positioned for another strong month in May as retail sales are estimated to surge 9.6% from a year ago. This positive performance is complemented by a projected 0.7% increase in average transaction prices. As a result, it is anticipated that consumers will spend nearly $47 billion on the purchase of new vehicles in May, showcasing a significant 13% growth from a year ago.

“Retail inventory levels in May are expected to finish at approximately 1.3 million units, remaining consistent with April’s level. However, this represents a substantial increase of 48% compared with May 2022. The improvement in vehicle availability has led to decreased dealer margins and increased manufacturer incentive spending in that same period. However, both metrics are relatively stable when compared with the previous month. The performance of the retail market continues to demonstrate robust demand for vehicles, augmented by consumers who have delayed purchases due to low inventory.

“Manufacturers continue to leverage increased vehicle production to allocate more vehicles to fleet customers. Fleet sales are projected to increase 50% from May 2022.”

New-vehicle transaction prices continue to rise, with the average price reaching a May record of $45,838. This is a 0.7% increase from a year ago. The record transaction prices means that consumers are on track to spend nearly $46.9 billion on new vehicles this month—the second highest for the month of May and 13% higher than May 2022.

“The improved supply of vehicles vs. a year ago has resulted in a decline in dealer profits. However, dealer profits remain well above pre-pandemic levels. The total retailer profit per unit—which includes grosses and finance and insurance income—is expected to reach $3,732. While this is 25.8% lower than a year ago, it is still more than double the amount in May 2019. The primary reason for the decline in profit is that fewer vehicles are being sold for prices higher than the manufacturer’s suggested retail price (MSRP). This month, only 31% of new vehicles are projected to be sold above MSRP, which is down from a high of 49% in July 2022.”

Total aggregate retailer profit from new-vehicle sales for this month is projected to be down 16.5% from May 2022, reaching $3.8 billion for the third-highest May on record.

“Retailers continue to engage in significant pre-selling of their inventory. However, due to higher inventory levels, more consumers are buying vehicles that are on the lot. In May, 46% of vehicles are projected to be sold within 10 days of their arrival at the dealership, which is down from the peak of 57% in March 2022. The average time that a new vehicle spends in the dealer’s possession before being sold is expected to be 30 days, up from 12 days a year ago, but still less than half the pre-pandemic average of 70 days.

“Manufacturer discounts have remained relatively consistent compared with April but have increased materially from a year ago. The average incentive spend per vehicle has risen 88.1% from May 2022 and is currently on track to reach $1,788. Expressed as a percentage of MSRP, incentive spending is currently trending at 3.7%, an increase of 1.6 percentage points from May 2022. One of the factors contributing to this low level of spending relative to historical norms is the lower discounts on leased vehicles. However, discounts on leased vehicles have risen significantly in recent months. This month, leasing is expected to account for 21% of retail sales, up significantly from the low of 16% in September 2022, but well below May 2019 when leased vehicles made up nearly 30% of all new-vehicle retail sales.

“Elevated pricing coupled with interest rate increases continue to inflate monthly loan payments. The average monthly finance payment in May is on pace to be $736, up $48 from May 2022. That translates to a 7.0% increase in monthly payments from a year ago. The average interest rate for new-vehicle loans is expected to be 7.0%, an increase of 206 basis points from a year ago.

“Used-vehicle prices have declined slightly from a year ago but remain close to all-time highs.  The average trade-in equity for May is trending toward $9,462, down $247 from a year ago, and down $613 since the peak in June 2022. For context, trade equity this month is still more than double the pre-pandemic level, helping owners offset some of the pricing and interest rate increases.

“In June, key metrics to monitor include inventory levels, pricing and interest rates. Despite the challenges posed by elevated interest rates and pricing, sales volume and transaction prices have displayed remarkable resilience, enabled by the combination of improved vehicle availability and pent-up demand. If most interest rate increases have already occurred, consumers can anticipate excluding this factor from future monthly payment increases, potentially sustaining demand. In terms of pricing, a notable portion of the industry’s price increases can be attributed to the sales mix of electric vehicles, while pricing for traditional gas-powered vehicles has demonstrated stability. It will be crucial to closely observe how manufacturers, consumers and other stakeholders in the EV space respond to any divergence in pricing. This becomes especially significant as the proportion of EVs within the overall sales mix continues to grow.”

Sales & SAAR Comparison

U.S. New Vehicle	May 20231, 2	April 2023	May 2022
Retail Sales	1,079,212 units (9.6% higher than May 2022)2	1,095,158 units	945,388 units
Total Sales	1,337,670 units (15.6% higher than May 2022)2	1,366,930 units	1,111,298 units
Retail SAAR	12.0 million units	13.4 million units	10.8 million units
Total SAAR	14.8 million units	16.1 million units	12.6 million units

¹ Figures cited for May 2023 are forecasted based on the first 17 selling days of the month.
² May 2023 has 25 selling days, one more than May 2022.

The Details

• The average new-vehicle retail transaction price in May is expected to reach $45,838, a 0.7% increase from May 2022. The previous high for any month—$47,362—was set in December 2022.
• Average incentive spending per unit in May is expected to reach $1,788, up from $951 in May 2022. Spending as a percentage of the average MSRP is expected to increase to 3.7%, up 1.6 percentage points from May 2022.
• Average incentive spending per unit on trucks/SUVs in May is expected to be $1,698, up $721 from a year ago, while the average spending on cars is expected to be $1,421, up $567 from a year ago.
• Retail buyers are on pace to spend $46.9 billion on new vehicles, up $5.5 billion from May 2022.
• Truck/SUVs are on pace to account for 79.1% of new-vehicle retail sales in May.
• Fleet sales are expected to total 258,500 units in May, up 49.6% from May 2022 on a selling day adjusted basis. Fleet volume is expected to account for 19% of total light-vehicle sales, up from 15% a year ago.
• Average interest rates for new-vehicle loans are expected to increase to 7.0%, 206 basis points higher than a year ago.

EV Outlook

Elizabeth Krear, vice president, electric vehicle practice at JD Power:
“Among the tax credit eligibility rules on newly purchased EVs, there are requirements for critical battery minerals and components. The requirements have significantly reduced the number of vehicles that qualify for the full credit, creating downward pressure on the affordability of EVs. When EVs are leased, however, none of these restrictions apply because the vehicles are technically classified as commercial. This makes the lessor eligible for the $7,500 credit, giving them the option to pass that credit along to customers.  Accordingly, lease affordability has surpassed purchase affordability in the JD Power EV Index, suggesting that EV lease volumes will surge during the next several months.

“New data shows that public charging station reliability has improved for the first time in two years. This improvement is not exactly cause for celebration, though. Through the end of Q1 2023, 20.8% of EV drivers using public charging stations experienced charging failures or equipment malfunctions that left them unable to charge their vehicles. What’s more, overall customer satisfaction with Level 2 charging—which accounts for 71% of all public charging—declined 11 points during Q1 2023. Customer satisfaction with faster Level 3 charging has improved, but far fewer customers currently have access to these charging points.”

Global Sales Outlook

Jeff Schuster, group head and executive vice president, automotive at GlobalData, parent of LMC Automotive:
“The global light-vehicle selling rate hit 85.4 million units in April, up nearly 2 million units from March. Sales volume was up 23.6% year over year to 6.8 million units, as the overall market continues to improve through increased production and less supply disruption. Of the major markets, China led the growth, up 81% from April 2022. Europe (+21.0%), India (+10.6%) and North America (+9.3%) also posted strong results.

“The selling rate in May is expected to decline slightly to 84.5 million units, but that is still well above May 2022’s 75.8 million units. Global light-vehicle sales are projected to grow to 7.0 million units, an increase of 12.8% from May 2022. Growth is expected to be more level across the various markets. Eastern Europe is an outlier at a nearly 20% increase, as volume returns despite the ongoing war in Ukraine. China is expected to grow 18.5%, followed by North America at 14.7% and Western Europe at 11%

“April’s volume was in line with expectations, so we are not making any material changes to the topline forecast for 2023. Volume is expected to reach 86.1 million units, up 6.2% from 2022. While risk is balanced overall, there remains some upside potential in 2023 if major markets avoid a recession or consumers show further resilience. There is some mild risk that volume has been pulled forward given expectations for an economic slowdown being delayed until late 2023 or early 2024. The outlook for 2024 global light-vehicle sales is currently holding at 90.3 million units, an increase of 4.9% from 2023.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info
About LMC Automotive www.lmc-auto.com

 

EV Owners Have Lowest Satisfaction with Most Important Mobile App Features, JD Power Finds

2023-05-26

jillian.breska

TROY, Mich.: 30 May 2023 — Usage of auto manufacturers’ mobile apps for electric vehicles (EVs) has increased, according to the JD Power 2023 U.S. OEM EV App Report,^SM released today. Even though app usage by owners of gas-powered vehicles has increased during recent years, EV owners are still likely to use their apps more often, especially for needs such as viewing active charging status or checking range information. Nearly two-thirds (66%) of EV owners use their brand’s app at least half of the time they drive, which is indicative of its increasingly important role in the EV ownership experience.

JD Power is increasing its presence in the field of customer satisfaction with automotive mobile apps as the industry faces ongoing challenges to provide a compelling customer experience. Acknowledging the increase of EV sales and model offerings, the report evaluates the all-important user experience with a brand’s smartphone app.

“Even though EV app usage has increased over time, the app features EV owners say are most important to them are among those that have the lowest satisfaction,” said Jason Norton, senior manager of global automotive consulting at JD Power, “Manufacturers need to focus on improving the performance of the areas that matter most to EV owners in order to maximize their impact and elevate the user experience.”

Following are some key findings of this report:

• Focus on what’s important: Speed and ease of navigation are the two most important app usage elements for EV owners, yet these are among the lowest-scoring areas overall. Conversely, an app’s visual appeal is least important to EV owners yet ranks near the top in satisfaction. This suggests manufacturers need to do a better job of focusing on areas that are most critical to app users to provide the most engaging and productive experience.
• Apps are a big deal: More than half (59%) of Tesla owners say the availability of the smartphone app had at least a moderate effect on their decision to purchase, compared with 35% of non-Tesla EV owners. Furthermore, 21% of Tesla owners say it had a major effect vs. just 7% of non-Tesla EV owners. As Tesla owners have often been on the forefront of EV trends, this suggests the industry must do a better job of communicating the availability and effect of their smartphone apps to help attract interested EV shoppers.
• Charge ahead: More than two-thirds (68%) of EV owners say that they use their app at least every other drive to monitor the charging process and viewing their available range, which is in line with 2022 results. While owners predominately charge their vehicles at home, 85% say they still desire the ability to find charging stations in case they need one while away from home.
• Feature desirability is high—and owners want more: Of the 25 most common app features, 19 features are cited as desirable by more than 70% of EV owners. However, only eight features are widely available throughout the industry.
• Help wanted: Most owners receive help from the dealer or manufacturer in explaining or setting up their smartphone app. More than eight in 10 (85%) EV owners say they received some sort of assistance, and 90% of premium brand owners (excluding Tesla) say they received dealership support. EV app features need to be explained to owners by dealership personnel, as highlighted by the 25% of owners who say they have never used their EV app because they didn’t know how to do so.
• App connection concerns: More than one-third (37%) of EV owners say they had some type of connection-related problem with their app in the past 30 days, up from 32% a year ago. This may suggest that increasing app usage is straining some manufacturers’ app network capacity.

Report Ranking

Tesla ranks highest among manufacturers’ EV mobile apps with a score of 838 (on a 1,000-point scale). Mercedes me connect (833) ranks second and MyHyundai (827) ranks third. The report average is 741.

The U.S. OEM EV App Report, formerly the U.S. OEM EV Benchmark Study, gauges EV owners’ experience with their brand’s mobile app. Insights are derived from surveying EV owners and an assessment of the most relevant EV mobile apps. Results are based on a standardized assessment approach relying on more than 340 best practices for vehicle apps that include more than 60 EV-specific attributes.

The report includes apps from the top 20 award-eligible brands that sell EVs in the United States; five profiled EV brands in Europe; and eight profiled EV brands in China. Additionally, almost 1,400 EV owners in the United States were surveyed in April-May 2023 to gather insights on app usage; feature desirability; and app overall execution.

For more information about the U.S. OEM EV App Report, visit https://www.jdpower.com/business/automotive/oem-ev-app-report.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: http://www.jdpower.com/business/about-us/press-release-info 

 

Vehicle Dependability Improves Despite Continued Problems with Technology, JD Power Finds

2023-02-08

 

TROY, Mich.: 9 Feb. 2023 — The JD Power 2023 U.S. Vehicle Dependability Study^SM (VDS), released today, reports an industry average of 186 problems per 100 (PP100) vehicles, an improvement of 6 PP100 from 2022. The study examines how 2020 model-year vehicles are currently performing in terms of quality, component replacement and appeal—including those vehicles with new technology—and helps automotive manufacturers design and build better vehicles to stand the test of time and promote higher resale value. A lower PP100 indicates higher performance.

Leading the industry’s improvement for fewer problems are mass market brands with 182 PP100, 8 PP100 lower than a year ago and 23 PP100 lower than for premium brands (205 PP100). The gap between the two segments is at its widest since the study launched 34 years ago and mirrors a trend that began in 2016. A driving force for the dependability disparity between the two segments is new technology introduced in vehicles. Premium brands usually have more technology, which increases complexity and the inherent likelihood of additional problems.

“It is typical in the automotive industry to roll out concepts and features by putting them in premium vehicles first,” said Frank Hanley, senior director of auto benchmarking at JD Power. “A bellwether for mass market brands looking to adopt and implement these technology features into their portfolio is in two of the industry’s preeminent studies, the JD Power Initial Quality Study^SM (IQS) and the Vehicle Dependability Study. Connecting insights from the two studies better informs automakers by substantiating trends and showcasing how some automakers are preventing problems from occurring early on and throughout the ownership experience.”

The 3-year-old vehicles measured in this year’s study were first examined in the 2020 U.S. Initial Quality Study. Six of the 10 highest-ranked brands in the 2020 IQS are among the 10 highest-ranked brands in this year’s VDS. Some of the most deteriorated areas from 90 days to three years of ownership are starter battery failures, outdated maps, Android Auto/Apple Car Play and voice recognition problems. The increase in problems in the technology area shows the importance that over-the-air updates can play in correcting issues with audio systems and keeping the information in them up to date.

The study was redesigned in 2022 to include features and technology that are available in current vehicles. It now covers 184 specific problem areas across nine major vehicle categories: climate; driving assistance; driving experience; exterior; features/controls/displays; infotainment; interior; powertrain; and seats.

Following are key findings of the 2023 study:

• Infotainment systems continue to be most problematic: The infotainment category continues to be the most problematic with an average of 49.9 PP100—almost twice as many problems as the next-highest category, which is exterior. Six of the top 10 problem areas in the study are infotainment-related, including built-in voice recognition (7.2 PP100); Android Auto/Apple CarPlay connectivity (5.5 PP100); built-in Bluetooth system connectivity (4.0 PP100); touchscreen/display screen difficult to use (4.0 PP100); not enough power plugs/USB ports (3.8 PP100); and navigation system inaccurate/outdated map (3.3 PP100). “IQS and VDS data are telling us that if the Android Auto/Apple CarPlay connectivity trend continues, this area could take over the least-coveted top spot for problems in long-term durability,” Hanley said.
• Technology improves appeal for parts that seem outdated: Owners’ relationships with their vehicles goes beyond wear and tear on parts; it also includes their expectations of how up to date the technology remains over time. For example, satisfaction scores for vehicle condition improve when vehicles receive over-the-air software updates to infotainment systems that are perceived to not be meeting today’s standards.
• Reduction in component replacement: Nearly two-thirds (63%) of vehicles required fewer component replacements in the past 12 months (excluding wear items), including key fob/key fob battery; brake rotors; headlight components/bulbs; and other exterior lights/bulbs, than in the 2022 study.
• Tie for the most dependable model: The Toyota C-HR and Lexus RX are the highest-ranked models in the study, each with 111 PP100. Both models show improvement in eight of the nine problem categories from a year ago.
• Biggest problem solvers: The top three brands with the greatest improvement in the number of problems are Ram (77 PP100 improvement), Volvo (41 PP100 improvement) and Nissan (35 PP100 improvement).
• Tesla officially included for the first time: Tesla is included in the industry VDS calculation this year for the first time, with a score of 242 PP100. However, because Tesla does not allow JD Power access to owner information in the states where that permission is required by law, Tesla vehicles remain ineligible for awards.

Highest-Ranked Brands

Lexus ranks highest overall in vehicle dependability, with a score of 133 PP100. Other premium brands ranking high for vehicle dependability include Genesis (144 PP100), Cadillac (173 PP100) and BMW (184 PP100).

Kia (152 PP100) ranks highest in the mass market segment for a third consecutive year, followed by Buick (159 PP100), Chevrolet (162 PP100), Mitsubishi (167 PP100) and Toyota (168 PP100).

The parent corporation receiving the most model-level awards is Toyota Motor Corporation with six, which includes the Lexus NX, Lexus RX, Toyota C-HR, Toyota Highlander, Toyota Sienna and Toyota Tacoma. BMW AG and General Motors Company each receive four segment awards—BMW AG for the BMW 4 Series, BMW X2, BMW X5 and MINI Cooper, and General Motors Company for the Chevrolet Blazer, Chevrolet Silverado HD, Chevrolet Tahoe and GMC Sierra. Hyundai Motor Group receives three segment awards for the Kia Forte, Kia Optima and Kia Sportage.

JD Power analysis shows that vehicle residual values can be significantly affected by long-term quality.

“The used-vehicle market has helped sustain dealers’ profitability in the past couple of years, but they need to know which vehicles to have on their lots,” said Jonathan Banks, vice president and general manager of vehicle valuations at JD Power. “Having vehicles with strong dependability scores will nurture a positive brand perception and drive foot traffic.”

The 2023 U.S. Vehicle Dependability Study is based on responses from 30,062 original owners of 2020 model-year vehicles after three years of ownership. The study was fielded from August through November 2022.

To learn more about the U.S. Vehicle Dependability Study, visit https://www.jdpower.com/business/automotive/us-vehicle-dependability-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: http://www.jdpower.com/business/about-us/press-release-info