using connectivity to find happiness

© 2013 J.D. Power & Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.J.D. POWER & ASSOCIATES PROPRIETARY AND CONFIDENTIAL—FOR INTERNAL USE ONLY

Using Connectivity to Find Happiness

Mike VanNieuwkuykExecutive Director, Global AutomotiveJ.D. Power & Associates

Wards Interior ConferenceMay 22, 2013

2 © 2013 J.D. Power & Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.J.D. POWER & ASSOCIATES PROPRIETARY AND CONFIDENTIAL—FOR INTERNAL USE ONLY

Importance of New Vehicle Technology


Most Important Factor in Choosing Your Make/ModelAutomotive Emerging Technology

Purchase factors with a 3 percentage point or more increase from 2008 to 2012

Advanced Technology Playing Larger Role in Vehicle Selection

Purchase Factor 2008 2009 2010 2011 2012Reliability/Durability 62% 65% 63% 60% 59%Interior comfort 51% 49% 50% 52% 52%Exterior styling 48% 46% 47% 48% 49%Quality of workmanship 49% 51% 50% 48% 47%Gas mileage 38% 46% 40% 40% 47%Dealer was convenient/Liked dealer in my area 42% 44% 42% 44% 43%Performance 39% 39% 38% 37% 38%Like the image this vehicle portrays 36% 34% 35% 35% 36%Advanced technology of the vehicle 32% 31% 32% 34% 36%Safety 35% 35% 34% 33% 33%Low price or payment/Ability to obtain financing 25% 29% 26% 29% 29%Low maintenance costs 27% 29% 28% 27% 28%AW D/4W D capability 25% 22% 26% 30% 27%Passenger capacity 27% 25% 26% 27% 26%Cargo capacity 21% 20% 21% 22% 22%High resale value 24% 23% 23% 21% 21%The "deal" 18% 22% 19% 21% 20%Better warranty 15% 13% 12% 16% 17%Environmental impact 10% 12% 10% 8% 10%Other 4% 4% 4% 4% 4%

Source: J.D. Power & Associates Initial Quality Study (IQS) (2008-2012)


Market Trends


Total SalesIn Millions

Retail SalesIn Millions

Sources: J.D. Power & Associates and LMC Automotive, February 2013

14.0 13.8 13.2 13.0 12.8

10.68.6 9.2

10.311.7 12.5 12.8 13.4

16.7 16.9 17.0 16.5 16.1

13.2

10.411.6

12.714.4

15.4 15.8 16.3

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

U.S. Light Vehicle Sales: Steady and Healthy


Models

2009 2010 2011 2012 2013 2014 20150

10

20

30

40

18

12

1917

22 23

2021

32

20

28

13

9

6

New Entry Drops

New minus Drops (3) (20) (1) (11) 9 14 14

Redesign 19 24 21 22 36 46 47Facelift 41 33 26 43 43 40 38

Sources: J.D. Power & Associates and LMC Automotive, February 2013

U.S. Model Activity: More Choices, Improved Choices

Increase in New and Refreshed Products


334

220

80 78

1987 1997 2008 2012

Pro

blem

s P

er 1

00 V

ehic

les

(PP

100)

Quality Equality

Quality gap between best and worst brands

Quality as a Differentiator Quality as a Given

Source: J.D. Power & Associates 1987 through 2012 U.S. Initial Quality Study (IQS)


WarrantyCasesMalfunctions

not brought to warranty

Soft “Inadequacies” needs addressed but not as

preferred

Missed Opportunities vehicle misalignment with market

expectations

Redefinition of Quality

WarrantyCasesMalfunctions

not brought to warranty

Soft “Inadequacies” needs addressed but not as

preferred

Missed Opportunities vehicle misalignment with market

expectations

Traditional Quality Consumer Quality

Design Quality

Consumer Behavior


Problem Per 100 Vehicles (PP100) 2007 2012 Delta• Total Problems 124.8 101.7 19%

• Interior 16.7 11.4 32%• Features/Controls/Displays 20.9 14.4 31%• The Driving Experience 15.2 10.7 29%• Exterior 21.9 15.7 28%• Tires (from OE Tire study) 77.8 60.1 23%• HVAC 11.7 9.6 18%• Engine/Transmission 17.6 15.3 13%• Seat 9.1 8.0 12%• Multimedia 11.5 16.4 (43%)• Navigation (Navigation Study) 170.1 379.1 (123%)

Increased Complexity(Soft “Inadequacies”)

…Usability has taken on greater importance

Quality Improvement: 2007 vs. 2012

Source: J.D. Power & Associates 2007 through 2012 U.S. Initial Quality Study (IQS) unless noted otherwise


Expanding needs- Increased flexibility (personalization, customization)- Increased functionality (value, usability)

Weekday Weekend

Average Daily Time In Vehicle

2 hours 27 minutes* 2 hours 4 minutes*

*Source: 2011 Arbitron Inc./Edison Research/Scarborough Research

16:23 per Week

Time in Vehicle


- Individualistic and self-directed

- Adept at social networking but are not personally social

- Function well in a virtual environment

- Have a global perspective

- Environmentally aware

- Well educated

- Technically savvy

- Lifelong use of communication and media devices

- Self identified experts at multi-tasking

- Expect instant action and satisfaction

Future Generation of Drivers

Ability to dowhat they want,when they want,where they want…

SAFELY


Items Brought Into VehicleTotal Sample

(Top %)

Mobile Phone 1

Pens/Pencils 2

Sunglasses 3

Napkins/Tissues 4

Wallet 5

Change 6

CDs/DVDs 7

Receipts/Small Papers 8

Purse 9

Emergency Kit 10

Garage Door Opener 11

Sm Cups/Bottles 12

Umbrella 13

Flashlight 14

Grocery Bags 15

Shopping Bags 16

Trash Items 17

Jumper Cables 18

Ice Scraper 19

Items Brought into VehicleEveryday/Few Times a Week – Minimum 50%

95% of consumers regularly bring a mobile phone into the vehicle

Source: J.D. Power & Associates 2009 Vehicle Interior Needs Study (VINS)


Connectivity Interests


Emerging Technology Interests

Source: J.D. Power & Associates 2013 Emerging Technologies Study^ Device/Application link interest is asked only of smartphone owners


Emerging Technology Interests: Connectivity



Emerging Technology Interests: Device/Application Link^


Types of Connectivity Owners Would Like to Integrate

Traditional In-Vehicle Information and Services

Social/Personal Connections

News and Entertainment Resources

Professional and Personal Organization

Personal Information Resources


Emerging Technology Interests: Usability



Add in the Complexity of Connected Services


Emerging Technology Interests: Ultimate Enabler – Autonomous Driving



Emerging Technology Interests: Ultimate Enabler – Autonomous Driving

Source: J.D. Power & Associates 2013 Emerging Technologies Study

Last year, consumer sentiment on was filled with excitement

regarding the possibilities a self-driving vehicle could offer

As autonomous driving becomes more of a reality, sentiment is

transitioning toward consumers still wanting to drive their own

vehicle until the technology gains consumer confidence and trust

Semi-autonomous driving features are paving the way for

this confidence and trust

2012

2013


Thank You

Mike VanNieuwkuykExecutive Director, Global Automotive

J.D. Power & Associates

[email protected]

using connectivity to find happiness

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