JD Powers: New Vehicle Designs Have Better "APEAL"

J.D. Power and Associates Reports:

New Vehicle Designs are More Appealing to Consumers, Which Can Result in Faster Sales and More Profit

Mid-Cycle “Freshening” Typically Makes Little Difference in Improving Customer Appeal

WESTLAKE VILLAGE, Calif.: 28 June 2006 — Consumers continue to give new vehicle designs higher ratings, providing automakers who can turn out new designs faster an edge in the marketplace, according to the J.D. Power and Associates 2006 Automotive Performance, Execution and Layout (APEAL) StudySM released today.

The study, now in its 11th year, measures owner delight with the design, content, layout and performance of their new vehicles. The APEAL Study has been redesigned for 2006 to provide better coverage of new technologies that didn’t exist previously.

The study finds that all-new models or models that have undergone a major redesign generally receive APEAL scores that are higher than average. This is critical, since models with higher APEAL scores tend to have more satisfied owners, sell more quickly and generate more profit.

Conversely, carryover models (those with virtually no changes from 2005) have APEAL scores that are slightly lower than average. Surprisingly, models that have received what the industry refers to as a “freshening” from the previous year typically earn APEAL scores that are no better than carryover models.

“The importance of product development efforts by the OEMs can’t be overstated,” said Chance Parker, executive director of product research and analysis for J.D. Power and Associates. “On one hand, new designs are clearly better able to stand out in an increasingly crowded market. They tend to sell faster and generate more profit. On the other hand, minor improvements seem to go almost unnoticed. All in all, OEMs may be better served to stop spending money on many mid-cycle freshening efforts and redirect those dollars for more dramatic redesigns.”

A number of all-new and redesigned models lead the model rankings for 2006. The Toyota RAV4, Hyundai Azera, Lexus IS 250/IS 350, Porsche Cayman, Ford Fusion, and Infiniti M-Series each rank highest in their segments.

Nissan has three segment-leading models, more than any other brand: Murano, Titan and Armada. Infiniti also receives two awards for the QX56 and the M-Series. Other brands with multiple awardees include Honda, Ford and Porsche.

APEAL is designed to complement the J.D. Power and Associates Initial Quality StudySM (IQS), which focuses on problems experienced by owners during the first 90 days of ownership. APEAL measures how gratifying a new vehicle is to own and drive. While the redesigned Initial Quality Study included a new measurement for design quality, the APEAL Study finds almost no relationship between a model’s overall APEAL score and its IQS design score.

“There are basically two schools of thought among consumers in determining which new-vehicle model to buy,” said Parker. “Many consumers are looking for a painless, trouble-free ownership experience, which, as we find in IQS, is certainly important. However, there is a large group of buyers who are most interested in things like comfort, style and performance. This group is often willing to put up with a few quality snags to get a vehicle they truly feel passionate about. For this group of consumers, there is more to an appealing vehicle than a lack of problems—even a lack of design problems.”

Among the models ranking highest in their respective segments in APEAL, three also received top rankings in the 2006 Initial Quality Study. They are: Porsche Cayman, Lexus IS 250/IS 350 and Suzuki Aerio. This is the first time that a Suzuki model has ranked highest in its segment in both IQS and APEAL.

Porsche, which ranked highest in the 2006 IQS, is also the highest-ranking nameplate in APEAL. Volkswagen is the most improved nameplate in APEAL.

The 2006 APEAL Study is based on responses from more than 63,000 purchasers and lessees of new 2006 model-year cars and trucks who were surveyed after the first 90 days of ownership.

For more detailed findings on new-vehicle APEAL performance as well as model photos and specs, visit the J.D. Power Consumer Center at www.jdpower.com

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.