JD Power: China gets in driver's seat

Instead of relying on word of mouth, presenting all the facts

In China, word-of-mouth advertising tends to drive car-buying decisions. JD Power and Associates did it simply by listening.

"Listening to the customer is fundamental to doing business today in this world," Jamey Power, a member of the family that built the legendary market-research firm, told China Daily in an interview. "If you don't listen to your customer, you're doomed to failure at some point."

The California-based company revolutionized the global automotive industry 45 years ago with its customer-satisfaction research on automobile quality and dependability. Power's father, James David Power III who founded JDPA in 1968, pioneered the use of independent, syndicated market research strategies that asked vehicle owners how satisfied they were with the cars they were driving. JDPA - which was sold to McGraw Hill Financial in 2005 - has since expanded its market research into industries such as travel and hospitality, financial services and insurance.

JDPA's role in helping the global auto industry understand the value of listening directly to the voice of the consumer is chronicled in the new book, Power: How JD Power III Became the Auto Industry's Adviser, Confessor, and Eyewitness to History. In the book, released by Fenwick Publishing, the senior Power looks back on his years in the auto industry.

Power, 50, the eldest of four Power children, calls the book "a relatively easy to read story about an iconic American brand." The book will help raise awareness of the Power family name, the married father of three said.

"When people meet us for the first time, they are like, 'I didn't even know there was a family or a person behind those JD Power awards.'"

Jamey Power personally played an important role in China's 60-year automotive story that has taken it to the top as the world's largest automotive market by sales. From 2000 to 2009, as the national economy boomed, he launched JDPA's international division and opened its Shanghai and Beijing offices. Those moves followed the company's decision in 1999 to open a Singapore office to expand its presence in the Asian automotive market.

Despite the influence that the opinions of family and friends exert on car buyers in China, JD Power's rigorously executed studies of consumer opinion on new-car quality and long-term dependability provided "more reliable conversation" to help buyers choose the best vehicles, Power said.

"Instead of Chinese people being too subjective or too reliant on what you might call unreliable word of mouth, what we were able to do was provide more facts," he said.

Its research also guided manufacturers in modifying vehicles to fit a local market's needs.

"We presented a substantive way that the industry could compete against each other," Power said. "So instead of relying on hunches or the best guess, we were able to tie it back to fact-based consumer reaction."

Power said JDPA's biggest accomplishment was making sure "that the manufacturers and the dealers were focused on the right issues that are based on the customer."

Before the company conducted its first research study in China, vehicles sold by global automakers in China tended to ignore local market needs. They were "producing vehicles that were manufacturer driven, rather than consumer driven," Power said.

JD Power had "a profound effect", he said, "in that we kept the manufacturers from trying to say, well this is the way a Volkswagen is made in Germany and you local Chinese will accept it the way it is. What Volkswagen needs to do to localize their Chinese product is different than what Hyundai needs to do," he said. "It's up to the companies to take the information that JD Power provides and use it in the best way for their particular organization."

The nation's strides to the top of the automotive market contrast sharply with the naivety many of its car buyers exhibited years ago, he said.

"When we started doing the survey (in China) in the early 2000s, a lot of people were buying their first vehicle and they'd never driven before," Power recalled. "There was a huge amount of good information we were providing back to the manufacturers and the dealers to help them figure out how to educate their customer as to what was normal and what was abnormal.

"It's normal to have to put oil in the car. Americans take that for granted. In China, they didn't know."

"It is a miracle what's occurred in China," Power said. "They've taken all the lessons from what other markets have provided them and they've just arrived at a level that is just remarkable."

michaelbarris@chinadailyusa.com