THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, June 12, 1996 TAG: 9606120542
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: 63 lines
It was 1968 and James David Power III had just gone into business in California evaluating market information for banks, gas companies, food companies and just about anybody else who wanted information on their customers.
Then ``a Japanese company with a funny name like Toyota'' set up an office in Los Angeles and its executives told Power they were looking for market research.
``Before I knew it, they were dominating our activities, and they were listening to the information,'' Power recalled Tuesday after speaking to the Hampton Roads Auto Dealers Association. ``Whereas in Detroit, they would twist the information to conform with decisions they'd already made.''
That was in the early days, before the Japanese were the JAPANESE, and before J.D. Power's name was synonymous with ``customer satisfaction.''
Twenty-eight years later, everybody in the auto business listens to the word out of Agoura Hills, Calif., from J.D. Power and Associates. More than 200 people in the auto business in Hampton Roads turned out at the Norfolk Waterside Marriott on Tuesday to hear what J.D.Power III had to say.
J.D. Power - whose friends call him Dave - sees a tough road ahead for those making and selling automobiles. The reason: they no longer control the market; customers do.
Supply exceeds demand - or at least potential supply. In North America alone, auto manufacturers have the capacity to build 3 million to 4 million more cars each year than the 15.3 million that customers are projected to buy this year.
``And here we are building better and better cars that last longer,'' Power added.
U.S. car makers have improved their quality to the point where there is only about one defect per car. However, their Japanese competitors have kept their lead on the quality front, reducing defects to 0.78 per car, Power said.
Customer satisfaction is also going to become tougher to achieve. Simply put: Even with the improvements in quality, expectations are higher. The younger the car buyer, the higher the expectations. Power said that's because younger people never experienced buying a car with multiple defects like their parents did.
``The Generation X-ers are more demanding because they didn't know about all the problems the older people faced,'' Power said. ``They want everything now, and for free if they can get it.''
The higher expectations put the pressure of selling cars squarely on the shoulders of car dealers - even if they have little to do with the quality of a car. The 4 million customers J.D. Power and Associates survey each year have told the company that 60 percent of their satisfaction with a product comes from how they are treated by the dealers.
Even the record recall Ford announced in April to replace faulty ignition switches is a sign of the customer-driven times. Since cars are made so much better these days than they were 20 years ago, recalls get a lot of news media attention just because ``there's less to talk about on the quality issues.''
Recalls put dealers face to face with their customers, giving them a chance to pass or fail the satisfaction test, Power said.
``The big winner of all this is the customer,'' he said. ``As the industry adjusts to this, it will be tough to change.'' ILLUSTRATION: Power spoke Tuesday to the Hampton Roads Auto Dealers
Association. by CNB