Canadian 2014 Automotive Solutions Guide. A Global Marketing Information Company jdpower.com

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1 Canadian 2014 Automotive Solutions Guide A Global Marketing Information Company jdpower.com

2 TABLE OF CONTENTS Setting the Benchmark Solutions... 2 Independent Benchmarking Proprietary Research... 2 Vehicle Consulting... 2 Retail Consulting... 2 Independent Benchmarking... 4 Avoider Study... 4 Manufacturer Website Evaluation Study (MWES)... 4 Consumer Retail Experience Study (CRES)... 4 Initial Quality Study (IQS)... 4 Vehicle Ownership Satisfaction Study (VOSS)... 5 Customer Commitment Index (CCI) Study... 5 The Power Information Network... 6 Retail Solutions... 6 OEM/Industry Solutions... 7 Automotive Events... 8 TalkAUTO Canada, Canadian Automotive Planning Conference... 8 Automotive Marketing Roundtable... 8 International Automotive Roundtable Western Automotive Conference Automotive Forum... 8 Social Media and Publications... 9 Canadian Analyst Note and Market Metrics... 9 Blogs Twitter... 9 LinkedIn... 9 Canadian J.D. Power Automotive Team J.D. Power Locations J.D. Power and Associates McGraw Hill Financial. All Rights Reserved.

3 SETTING THE BENCHMARK Today s global automotive industry could face far more change than stability during the next several years and at a pace it hasn t experienced since the first car rolled off the assembly line more than a century ago. With the rise of annual vehicle sales in the world s mature auto markets, coupled with the emergence of such new growth markets as China, automakers today are in a race to tailor the design of new vehicles to fit the needs of local consumers as well as the emerging technologies, all the while increasing sales and overall market share. Despite these shifting dynamics, the automotive industry remains steadfast in benchmarking its overall success against one key ingredient the Voice of the Customer. For more than 45 years, J.D. Power has been a trusted advisor in measuring the Voice of the Customer in the automotive industry, helping clients measure, understand, and improve the key performance metrics that drive growth and profitability. The company s full suite of solutions are designed to help automotive clients achieve their highest performance in the areas of product quality, retail sales, customer experience, marketing and media planning, and auto financing, among others. To learn more about J.D. Power and its services, please visit jdpower.com. Automakers today are in a race to tailor the design of new vehicles to fit the needs of local consumers as well as the emerging technologies, all the while increasing sales and overall market share J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 1

4 SOLUTIONS Independent Benchmarking J.D. Power s syndicated research provides insight for manufacturers and suppliers in their quest to satisfy today s informed consumers and customers. J.D. Power independently funds industry-wide assessments of companies, products, and services and offers comprehensive research reports and analysis to help the automotive industry better understand their strengths and weaknesses in a competitive context as well as from the customer viewpoint. Proprietary Research J.D. Power also offers proprietary services to evaluate client sales and service processes or to measure and monitor quality and customer satisfaction over time. J.D. Power works closely with clients to develop customized customer satisfaction and quality tracking programs and provides clients access to daily, weekly, monthly, or quarterly data that will enable them to identify issues and implement process and product improvements. Vehicle Consulting Quality problems are less often associated with actual defects and more often related to the ability of the product to meet customer expectations. J.D. Power helps automotive clients successfully deliver on those expectations by providing consulting services that span the entire product life cycle from product strategy and development through assembly and sustainment. Using proven methodologies that yield measurable improvements, the company s vehicle consulting services help clients develop competitive advantages by integrating the Voice of the Customer into their strategic planning, development, supplier operations, launch/production, and sales and service. Retail Consulting For many clients across the automotive industry, the Canadian automotive practice provides comprehensive retail consulting services, which integrates J.D. Power s cutting edge Voice of the Customer research into the dealership retail experience. By evaluating consumer shopping behavior, expectations and actual interactions, we can ensure a brand s retail experience matches the quality of the vehicle and the expectations of the brand s customers J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 2

5 Examples of Proprietary Solutions Dealership sales and service tracking Vehicle quality tracking from an initial quality or long-term dependability stand-point Sales rejector analysis Service defector analysis Initial shopping behavior and upper funnel sales analysis Avoider study and analysis Certification programs to ensure compliance with predetermined manufacturer or industry standards J.D. POWER CANADIAN AUTOMOTIVE SYNDICATED SOLUTIONS OWNERSHIP CYCLE J.D. POWER CORE STUDIES TARGET COVERAGE VALUE PROPOSITION Research and Consider PowerVision Monitor (PVM) OEM Website Evaluation (MWES) Intentions 12 months prior to purchase Online research behaviour Helping clients turn data sets into effective business strategies Shop and Purchase PIN Transaction Data Consumer Retail Experience (CRES) Point of purchase 90 days after purchase Quality and Early Service Initial Quality (IQS) 90 days after ownership Extended Service Vehicle Ownership Satisfaction (VOSS) Customer Commitment Index Study (CCI) 1-3 year old ownership 4-12 year old servicing 2013 J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 3

6 INDEPENDENT BENCHMARKING Marketing Avoider Study (Available for Proprietary) The Avoider Study examines the reasons why consumers do not consider particular models when shopping for a new vehicle. The study identifies the level of awareness and familiarity among consumers who avoided each model. The study also highlights the productrelated, image-related, and external reasons why consumers do not consider specific models, and details consumerperceived weaknesses that, if addressed, may increase buyer consideration rates. In addition, the study explores why newvehicle shoppers consider, and then reject, particular brands that were shopped for at a dealership. Advertising and Promotion Manufacturer Website Evaluation Study (MWES) Annual Publication Q2 The Manufacturer Website Evaluation Study (MWES) examines the website features that are important to consumers when shopping for a new vehicle online. The study examines which OEM websites provide the most useful information and identifies the features and content that add value to the new-vehicle shopping process. The study provides the competitive information necessary to stay ahead of the curve in terms of website content, appearance, navigation, and speed. The MWES provides an objective measurement of the ability of auto sites to drive visitors to the dealership. Sales Consumer Retail Experience Study (CRES) Annual Publication Q4 This study provides a comprehensive analysis of the new-vehicle purchase experience from the buyer perspective. The study measures the ability of the dealership to manage the sales process from product presentation and price negotiation to the finance and insurance process and final delivery. Incorporating feedback from buyers as well as rejecters (shoppers who consider but don t buy), the study provides insights into buyer needs and expectations, as well as suggestions for improving the sales process. Product Quality and Service Initial Quality Study (IQS) Annual Publication Q4 The Initial Quality Study (IQS) provides manufacturers and suppliers with in-depth diagnostic information on new-vehicle quality after 90 days of ownership. The study uses problems per 100 vehicles (PP100), often referred to as things gone wrong, as a unit of measurement of owner-reported problems. Overall, more than 225 problems are evaluated in two categories: defect/ malfunction and design-related problems. Make and model PP100 scores are based on all problem types J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 4

7 Vehicle Ownership Satisfaction Study (VOSS) Annual Publication Q3 This study evaluates vehicle dependability, as well as vehicle and service satisfaction, after 1 to 3 years of ownership. The study examines more than 200 potential problems in eight major categories, based on problems per 100 vehicles (PP100) to measure overall performance. The service satisfaction portion of the VOSS surveys owners regarding their recent dealership service experiences for both warranty and customer-pay work. Owners are surveyed regarding their recent dealership service experiences for both warranty and customer-pay work. The study measures satisfaction in five key factors of the service experience Service Initiation; Service Advisor; Service Quality; Service Facility; and Vehicle Pick-Up and provides performance diagnostics for each. The VOSS also measures perceived cost of ownership during the first 1 to 3 years of ownership. The cost of ownership measure takes into account the owner s perceived cost of fuel consumption, insuring the vehicle and servicing the vehicle. The Automotive Performance, Execution and Layout (APEAL) Study, which is part of the broader VOSS platform, identifies newvehicle owner likes and dislikes. The study helps manufacturers and suppliers develop innovative new products and identifies key features that excite and delight owners. The study also helps automakers understand the relative importance of these features as perceived by owners. The APEAL Study, which may be used to support new-product development initiatives, is based on new-vehicle owners evaluations of more than 90 attributes in 10 categories: Vehicle Exterior; Vehicle Interior; Storage and Space; Audio/ Entertainment/Navigation; Seats; Heating, Ventilation and Air Conditioning (HVAC); Driving Dynamics; Engine/Transmission; and Visibility and Driving Safety. Customer Commitment Index (CCI) Study Annual Publication Q3 The Customer Commitment Index (CCI) Study examines customer satisfaction with maintenance and repair service at new-vehicle dealerships, as well as in the automotive aftermarket. Owners of vehicles 4 to 12 years old are surveyed regarding their most recent service experiences for both in-warranty and customer-pay work. The study examines satisfaction with the five measures of the service experience Service Initiation; Service Advisor; Service Quality; Service Facility; and Vehicle Pick-Up and provides analytical diagnostics for each measure. The study also examines the share of dollars and service visits for both dealers and non-dealers J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 5

8 THE POWER INFORMATION NETWORK The Power Information Network (PIN), a division of J.D. Power, provides clients throughout Canada and the United States with real-time automotive information, analysis, and decision-support tools to reduce risk exposure, improve marketing and remarketing effectiveness, and increase profitability. PIN automotive solutions are based on the collection and analysis of daily new- and used-vehicle retail transaction data from more than 950 automotive franchises in Canada. Details from both types of transactions are evaluated to create products that focus on key measures, including price, cost, profit, finance, lease, and trade-in values. PIN advanced market intelligence solutions address industry needs and assist clients in improving product planning; vehicle production and distribution processes; marketing and incentive strategies; new-vehicle pricing and revenue management; inventory optimization; and used-vehicle remarketing. PIN solutions address the market intelligence and decision-support needs for a complete array of businesses operating within the automotive industry. Solutions focus on delivering real-time market insight; the highest levels of data accuracy and integrity; and methodology transparency, and J.D. Power s team of automotive experts support client needs. Retail Solutions Dealers enrolled in PIN have access to a full suite of dealer-specific and market-comparison reports designed by J.D. Power, and also receive a complimentary subscription to the company s Powergram automotive newsletter. PowerDealer New- and Used-Vehicle Sales Tools Used-Vehicle Inventory Tools The Used-Vehicle Booking Tool and Guidebook Pricing tools allow dealers to improve inventory mix by providing model-level ROI performance, along with pricing and market demand metrics. These tools assist in identifying the most desirable models for a given market, in terms of ROI, turn rates, and pricing. Customer Mapping and Geographic Tools These tools allow dealers to benchmark marketing program effectiveness by identifying their customers on Google maps or comparing sales across selected geographic locations and time periods. New/Used Average Deal Recap Report Identifies performance gaps versus the market on deal structures and highlights areas where adjustments may be made to improve volume and profitability. New-Vehicle Inventory Performance Report Provides performance by model line for each franchise the dealership sells, compared with other PIN dealers in the market area carrying the same franchise. This information improves the ability to identify stocking options by monitoring inventory movement and gross potential. New/Used Finance/Leasing Report Allows retailers to identify lender options, buy rates, and term structures of lenders in their geographic market J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 6

9 PowerDealer with RevUP Fixed Operations Tool Service Key Performance Indicators Provides a quick snapshot of current business, customized to present user-defined goals across a number of key performance indicators (KPIs). Summary Scorecards and Employee Performance Reports A performance-based system that provides service managers the ability to track each staff member s sales data and identifies which maintenance sales items are being sold versus those that are not. The detailed, printable scorecards for each individual provide managers with information necessary to motivate high performers who are already achieving desired results, as well as coach and develop low performers. OEM/Industry Solutions PIN data enables manufacturers, financial organizations, and suppliers to leverage the foundational benefits of real-time transactional data through a set of tailored solutions that address critical business needs. These solutions, which merge transaction data with proprietary cleansing and calibration techniques and include additional data sets, ensure the most accurate and timely information available. PIN Explorer A dynamic newand used-vehicle sales reporting tool that enables users to perform competitive analyses; track newproduct introductions; conduct market comparisons; and isolate weaknesses and strengths. The advanced analytical functions of PIN Explorer include customized reports, dashboard capabilities and the ability to automate reporting through subscriptions. PIN Incentive Spending Report A bimonthly report that merges take rates with program offerings and provides complete transparency regarding how OEMs are spending money for incentive offers, as well as take rates and contribution to spend for every incentive on every model in the industry. Also includes a measure for vehicle purchase price net of incentives. PIN Model Level Share Report A weekly report that tracks changes in sales and market share in near real time to benchmark sales performance by segment, manufacturer, nameplate, and model against the previous year, month, or week. Also includes forecasts of retail and fleet industry sales J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 7

10 AUTOMOTIVE EVENTS TalkAUTO Canada The TalkAuto Canada conference, held annually in November, showcases a variety of strategic insights and tools aimed at dealers, manufacturers, as well as the broader automotive industry suppliers. The goal of this conference is to provide a forum through which automotive industry members can interact and exchange ideas on critical issues affecting the sector. Automotive Marketing Roundtable The J.D. Power Automotive Marketing Roundtable is an annual conference held in October, designed to help automotive professionals leverage digital media for sales and marketing purposes. Attendees have described the Roundtable as the Super Bowl of automotive marketing events and is the event for anyone doing business in the automotive industry in today s digital marketplace. This event is intended for automotive OEMs, retailers, marketers, agencies, third-party websites, and other professionals working, or interested in, the automotive marketing environment. International Automotive Roundtable The J.D. Power International Automotive Roundtable is an annual forum held in February in conjunction with the NADA convention that focuses on critical issues and solutions impacting current and future automotive operations. Every year, an elite group of speakers provide attendees with new insights into emerging automotive trends, marketplace actions, and successes in customer satisfaction in the face of rapid industry changes. This Roundtable is intended primarily for OEMs and automotive retailers, and offers unique opportunities to meet and network with key leaders who are shaping the future of the automotive industry. Western Automotive Conference The NADA/J.D. Power Western Automotive Conference (WAC) is a half-day event of exceptional keynote presentations and compelling executive OEM panel discussions focusing on the California/LA area auto marketplace. This event precedes the LA Auto Show press preview days and is hosted by the LA Auto Show, and held in association with the Greater Los Angeles New Car Dealers Association (GLANCDA) and the California New Car Dealers Association (CNCDA). The inaugural conference in 2012 attracted over 300 attendees. The WAC audience consists of manufacturers, dealers, suppliers, and advertising and marketing professionals who seek to acquire a unique macro perspective on the US economy and the auto industry, and for insights on the latest trends in the western United States automotive market. Automotive Forum The Automotive Forum is a one-day event in New York City that brings together leaders from OEMs, suppliers, retailers, and the media to discuss our industry. The forum is jointly hosted by NADA, J.D. Power and the New York International Auto Show. The Automotive Forum goes beyond the headlines to explore how developments in the industry will impact the various sectors moving forward. The day s agenda includes a mix of keynote addresses and panel sessions to explore from several perspectives how past events will influence the future. Most importantly, participants have the ability to ask challenging questions during the panel discussions. There are also several networking opportunities throughout the day for professionals to connect with a diverse group of executives and peers across the auto industry J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 8

11 SOCIAL MEDIA AND PUBLICATIONS Canadian Analyst Note and Market Metrics The Analyst Note is ed to subscribers each month. In each issue, the analytical team at J.D. Power tackles a single subject affecting the industry and provides data and insightful opinion on the matter, drawing information from all available sources, including syndicated research studies and Power Information Network (PIN) data, among others. Accompanying the Analyst Note is a one page snapshot, Market Metrics, featuring key performance indicators based on PIN data. Blogs Global Automotive Blog (GAB) The GAB includes news about world markets; highlights from J.D. Power s automotive studies; social media insights; forecasts; insights from our automotive experts; and insights that registered blog members bring to the table. Visit jdpowercontent.com/globalauto. LinkedIn J.D. Power Automotive Professionals LinkedIn Group This group was created exclusively for automotive professionals working in the industry across segments and functions and is intended for networking, discussions, and information sharing among group members. J.D. Power Automotive Marketing Roundtable LinkedIn Group The networking experience that Automotive Marketing Roundtable attendees participate in is a valuable aspect of this annual event. This group was created to provide a forum for continued networking and information sharing among attendees throughout the year. While this group is intended for active attendees, members may invite others interested in automotive Web marketing to join and participate. News about and from J.D. Power s public relations J.D. Power news, updates, data, and perspectives for and about the automotive industry J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 9

12 CANADIAN J.D. POWER AUTOMOTIVE TEAM Darren Slind Senior Director and Regional Practice Leader Canada and Latin America J.D. Ney Supervisor, Automotive Practice (Research and Consulting) Virginia Connell Automotive Account Analyst (Research and Consulting) Brian Murphy Senior Manager, Automotive Practice (PIN) Justin Ramkishun Automotive Account Analyst (PIN) Doris Harrison Senior Research Supervisor Elena Sheehy Operations Support Manager, Canada and Latin America J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. 10

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