Auto research firm J.D. Power and Associates will attempt to do for new-vehicle launches what it has been doing with consumer attitudes for years: telling automakers what they are doing wrong.
The new initiative -- called the Vehicle Launch Index -- will have Power advising auto companies on their forecasting mistakes, reviewing their early pricing assumptions, and even critiquing advertising campaigns using data from launches across the industry.
There will be 88 new and restyled model launches in 2009, said Dave Sargent, Powers vice president of research. Some of them will succeed. Others wont, and frankly should never have gotten approval to see the light of day.
We hope to help the companies avoid making that mistake.
Power revealed the plan today at its International Automotive Roundtable in New Orleans. The cost to automakers for the consulting service will vary.
Launches have become more challenging for manufacturers as they push new and redesigned models into a depressed U.S. market. Sargent says part of the problem is vehicle program managers who are reluctant to challenge their superiors marketing assumptions.
Its hard for people inside the company, especially if they want to get ahead in their career, to derail a project by saying, This plan is flawed, he said.
Another issue is faulty pricing, says Rod Wright, Powers vice president of automotive retail operations.
The people on a project might be excited about a technology or a type of content, and plan for an additional $600 in price because of it, Wright said. But by the time the vehicle gets to market, the added content is worth nowhere near that. In which case, the projected revenues are all off.
The index will follow launches for the first 12 months of a models 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 Powers consumer-oriented studies on initial quality and customer satisfaction.