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Gleaning
Value from J.D. Power Studies: An Index of Total Cluelessness?
Auto on Info August 2007
Gleaning Value from J.D. Power Studies: An Index of Total Cluelessness?
By James B. Bleeker
We begin by plotting (1) the normalized values of Consumer Reports' 2007 Reliability Scores for 36 motor vehicle lines (found on page 25 of the April issue of Consumer Reports) versus (2) the normalized differences of J.D. Power and Associates' recently released complaint frequencies (available at www.jdpower.com). We have:
From the very scattered distribution of the plotted points (and the resulting very low R2 value and quite horizontal character of the regression line), we see that CR's reliability scores and J.D. Power's complaint frequencies bear very little relationship to each other.
We find a similar absence of relationship if we plot the Reliability Percentranks for model year 2002 against the normalized differences of J.D. Power's complaint frequencies, as the following chart depicts.
Possible Explanations
Some possible explanations for the absence of relationship are:
1. J.D. Power's complaint frequencies treat only model year 2004 while Consumer Reports reliability scores are based on model years 2004-to-2006 and the Reliability Percentranks are for model year 2002.
2. J.D. Power's survey seeks out complaints without distinguishing between the arguably trivial and the serious, and Consumer Reports queries for serious problems.
3. Consumer Reports' survey pool - its subscribers - may have a much higher mental alertness and more acute awareness than a pool of U.S. consumers at large.
The first possible explanation surely accounts for a little bit of the absence of relationship, as the following chart plotting the Reliability Percentranks for model year 2002 versus the normalized values of CR's 2007 reliability scores suggests.
Note that the coefficient of the x-variable (the slope of the regression line) is much closer to 1 (i.e., the line is much more diagonal than horizontal), but nonetheless, not diagonal, although much of the difference between this regression line and a diagonal line may result from the expedited dilapidation of Big Three - GM, Ford and Chrysler - vehicles after the first 3 years.
To see the difference that one model year makes, we have the following chart.
While the regression line is even more diagonal, we see a fair amount of shifting at the bottom end of the reliability spectrum, likely because at the bottom end of the spectrum the differences in quality may be smaller.
Hence, the first possible explanation accounts for a little bit of the difference, but not much. This suggests that some combination of the second and third possible explanations account for the bulk of the absence of relationship between CR's reliability scores and the normalized differences of J.D. Power's complaint frequencies.
An Index of Cluelessness?
The largest negative values obtained by subtracting the normalized differences of J.D. Power's complaint frequencies from the normalized values of Consumer Reports' 2007 reliability scores may shed light on the primary reason for the negligible relationship depicted in the first of the above charts. The five largest negative values and the respective motor vehicle lines holding them are given in the following table.
Table I: The 5 Largest Negative Values from Subtracting the Normalized Differences of J.D. Power's Complaint Frequencies from the Normalized Values of Consumer Reports' 2007 Reliability Scores Mercedes-Benz -.74 Cadillac -.51 Jaguar -.42 Buick -.36 Hummer -.31 It appears that Mercedes, Cadillac, Jaguar, Buick and Hummer owners, in the main, go through life with no awareness, not a clue, and in complete oblivion, as to how bad, or truly awful, their vehicles are. As General Motors accounts for 3 of the above 5 lines, this is surely good news for GM and its executives and shareholders; however, one cautionary note before celebration begins:
Year-to-date sales by Jaguar (third on the above list) are down 29.7% and Ford Motor Company hopes to dump the line by September 30th of this year.
Two interesting questions that this apparent abandonment of reality by many Mercedes, Cadillac, Jaguar, Buick and Hummer owners raises are:
1. Does it extend to all of their worldly affairs?
2. If so, should GM trustees, for the welfare of the company and its shareholders, fire any GM executive who owns, or has owned within the past 10 years, a Cadillac, Buick or Hummer?
Those who use the ownership of a GM vehicle as rather an index of vacuousness will likely have a quite definite opinion on the answers to these queries, although the range of answers to the latter query by such may well be across the board.
The Rule of Intersection Reviewed
In "The J.D. Power Surveys: Gleaning Values from Things That May Be Worth, Individually, Something Close to Nothing: GM in the Dumps Again," Auto on Info, June 2007, site manager proposed, in order to compensate for the more diminutive consumer value of J.D. Power's individual surveys, a rule of intersection:
Take the intersection of the sets of the 10 best motor vehicle lines in J.D. Power's two most recent 90-day survey results and two most recent 3-year survey results to obtain a list of automobile lines from which consumers may shop, with a measure of confidence, for a quality motor vehicle.
We do the intersection of these four sets again, this time substituting the results of J.D. Power's 2007 3-year survey for those of its 2005 3-year survey. We obtain the following list:
Lexus Toyota Honda, from best to better by average rank for the four surveys. This ranking corresponds precisely with that obtained by using the 1998-2002 Reliability Percentrank average, as the following table sets forth.
Table II: J.D. Power Ranks for Its Top Three Lines by the Rule of Intersection and the Ranks of These Three Lines by the 1998-2002 Reliability Percentrank Average J.D. Power Rank 1998-2002-Reliability-Percentrank-Average Rank Lexus 1 1 Toyota 2 2 Honda 3 3 It again appears that the Rule of Intersection accords the composite use of J.D. Power survey results some consumer value.
Source for Jaguar sales: "Automobile Sales Statistics," Wall Street Journal, August 2, 2007, p. A7
Remaining sources: As linked or noted above
Related Web Pages Milestones in Automotive Quality The Bottom Line on Auto Reliability Summary of the Best and Worst Table and Chart Summary of the 2007 Reliability-Durability Updates
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