"Subcompact crossovers are entry level in the sense that they introduce a customer to the brand," Jominy said at the presentation. "But they are anything but entry-level when you think of the content, the quality, the high riding position. They are not vehicles someone has to compromise on," he said.
Other surprising industry trends, according to the Franchise Assessment:
- The definition of "quality" is evolving in the industry. More and more, what consumers mean by "quality" refers to electronics, infotainment and driver-assist systems, as opposed to strictly mechanical performance, Jominy said.
"Quality is no longer the classic 'transmission started to fall out, car cannot be driven' sort of thing. Human-machine interface — difficult-to-understand issues — those are an indicator of quality. Those other problems, thank goodness, have pretty much been eradicated," he said.
- There is no accounting for taste: Customers show contradictory behavior in their brand loyalty behavior, Jominy said.
Customers for some brands report many problems on J.D. Power initial quality surveys, yet they still give their vehicles high marks in the J.D. Power Automotive Performance, Execution and Layout Survey. They may even continue to recommend the brand to others, despite reporting a large number of problems.
- A small lineup makes it hard for a brand to grow in sales. Some smaller brands enjoy high satisfaction and loyalty among their customers, but suffer from a poor image from people who don't own one of its vehicles.
A brand with a limited lineup may also lose customers as their life stage and driving needs change. And as a result, those small-lineup brands lose more defectors than they gain in conquests, Jominy said.
But he added that there's also a point of diminishing returns for larger and more complex lineups. Those can be expensive to build and promote.