J.D. Power Initial Quality Survey defeats itself

The J.D. Power & Associates Initial Quality Survey has become a victim of its own success.

Twenty-three years after then-owner Dave Power started preaching that automakers didn’t take quality seriously, manufacturers do take it seriously. And they’re doing such a good job that the Power IQS is almost meaningless as a buyer’s guide.

“There’s not much difference numerically between brands,” Power survey meister David Sargent said when he unveiled the 2009 results yesterday at the Detroit Athletic Club.

That’s an understatement. In the first 90 days of ownership, car buyers noticed an average of 108 problems per 100 vehicles, down from 118 a year ago. Translating the IQS-speak, that’s 1.08 flaws per vehicle, a tenth of a problem per car better.

There’s lots of good news in the IQs this year. The 10-point improvement (see, doesn’t that sound better than a 0.1-point gain?) is the biggest since 2004. The gains came even as the U.S. auto industry was imploding and automakers were whacking assembly-plant workers left and right.

The industry average is the lowest ever, even after J.D. Power expanded the IQS “flaws” from things-that-broke to also include things-hard-to-work.

But the 37 surveyed brands are bunching up tight against each other on the high-quality side of the ledger -- and it’s hard to see much difference. The difference between fifth place (Honda) and 24th place (Saturn) is one-fifth of a flaw per vehicle.

The best brand (Lexus) is less than twice as good as the worst (Mini). More than half the brands (19 of 37) are numerically tied with at least one other. Sargent acknowledged a single point difference is “not statistically significant,” which means Toyota (101), Ford (102) and Chevrolet (103) brands are “tied.”

So if I buy a $25,000 Mini (the worst IQS brand) instead of a $50,000 Lexus (the best IQS brand), the odds are 80-20 that I’ll have one more flaw? Gee, guess I’ll use that as my No. 26 tie-breaker in my decision.

Over the years, critics have griped about J.D. Power’s methodology -- not a random sample and too-small samples on less popular models -- and policies, such as placing equal numerical weight on blown engines as on vibrating ash trays. Others complain that Power derives its income from the manufacturers it surveys.

I say, so what?

For all its flaws, the data are the best available. And the IQS has driven continuous improvement in vehicle quality for years, acting as both carrot and stick. Automakers grumble, but they work very hard to improve their scores. And they pay J.D. Power for the right to use its name and endorsement on their advertising.

Dave Power was right and his data changed the industry’s behavior. But the industry’s better performance is forcing J.D. Power, now owned by McGraw Hill, to base its endorsements on increasingly arbitrary numbers.

In my eyes, that’s vindication for Dave, but potentially a Pyrrhic victory for J.D. Power.

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