THE AUTOEXTREMIST

January 28, 2009

J.D. Power’s latest money-making gambit is D.O.A.

By Peter M. De Lorenzo

Detroit. Since it’s award season and all, you have to hand it to the greed merchants at J.D. Power and Associates - the folks who turned award-giving from a cottage industry with at least a modicum of credibility into a money-churning conglomerate that exists solely for making wheelbarrows full of money - because they continue to come up with creative ways to stretch their business model while fleecing gullible industries, especially the auto industry, which heretofore now was seemingly incapable of saying “no.”

Well, this time, the Power juggernaut just may have carried their award scam too far. Their latest money-making brainstorm? Something called the “Vehicle Launch Index.” The “VLI” is a device that Power will use to tell automakers what they’re doing wrong in vehicle launches, right down to critiquing ad campaigns and vehicle pricing. As Automotive News first reported, “The index will follow launches for the first 12 months of a model’s life, measuring ad effectiveness, consumer response, dealer gross profits and incentive spending. A summary of the index will be distributed publicly, but the findings will go to a narrower audience than Power’s consumer-oriented studies on initial quality and customer satisfaction.”

Translation? Power will unleash enough “free” data to garner publicity and then shame the manufacturers into buying into their “expertise,” a formula they’ve been juggling for years to pry mountains of cash out of cowering manufacturers who are deathly afraid of offending The Grand Poobahs of Meaningless Awards.

Remember, these are the same guys who convinced the manufacturers and the consumer public alike that its Initial Quality Survey – the one that takes into account an owner’s experience with a new vehicle in the first 90 days – is an accurate barometer of how that vehicle will perform throughout the length of ownership, even though there was little indication that was actually the case. (This was one beautiful scam, one that convinced the spineless weasels at the manufacturers to actually gear their quality efforts to achieve outstanding results on the IQS, to the detriment of long-term quality performance over the life of a typical three-year ownership period. Nice.)

The trouble with all of this - besides the fact that Power’s motives are plain to all who will actually look beyond their usual self-promotional bluster - is that Power has no credibility to offer vehicle launch expertise of any kind. Sure, they’re deftly expert at promoting and marketing their own brand, but that has little or nothing to do with actually launching a real live vehicle into the grimmest automotive market in 35 years.

The fact that Power actually believes that they will be able to “help” the auto companies through reams of statistical analyses and tons of research is flat-out ludicrous – and delusional. The idea might please certain stat-heads out there who believe that if they were just given the chance they could fix the auto industry’s problems with their personally concocted number-crunching philosophies, but it actually has zero to do with the successful launching and marketing of a vehicle. And I can safely assure you that it has less than zero to do with the effectiveness of the advertising too. (Just the idea of the Power minions weighing-in on advertising is a sickening thought.)

“There will be 88 new and restyled model launches in 2009,” said Dave Sargent, Power’s vice president of research, as reported by AN. “Some of them will succeed. Others won’t, and frankly should never have gotten approval to see the light of day. We hope to help the companies avoid making that mistake.”

Oh really? And how is that going to happen exactly? By cooking the numbers? It’s a lot easier lobbing grenades in from the cheap seats, but if you’ve never sweated over a product launch - or the pricing, marketing and advertising decisions that go with it - then there’s no amount of number crunching that’s going to help you come up with a “plan,” at least one that’s worth a shit that is.

J.D. Power and Associates has always dreamed big, but this latest money-making scam betrays what they’re really all about (besides the money, of course) and that is that they’re frustrated wannabe auto industry titans who have talked themselves into believing that they not only matter, but that they actually have The Answer. And they see the current precarious market situation as their golden opportunity to stamp their statistically-warped vision on the automotive world once and for all, a depressing thought and a recipe for disaster if I ever heard of one.

J.D. Power has honed its brazen formula of Unmitigated Gall + Unmitigated Bullshit = Huge Wads of Cash exceedingly well over the years, and too often the auto industry blindly catered to Power with little rhyme or reason other than the fact that they were afraid what would happen if they didn’t bow down to them.

Fortunately, the industry has a lot more to worry about than J.D Power’s latest money-making gambit these days, because a basic survival mode has brought clarity to the industry’s thinking that didn’t exist before - and it’s about time.

And let us take a minute to digest the words “clarity” and “industry thinking” again, because those words used in the same sentence spell serious trouble for J.D. Power, which is why their new “VLI” will be Dead On Arrival before it even gets out of the gate.

Thanks for listening.