For Audi, analysis print conveys good news in Power IQS results

Audi climbed again in the annual J.D. Power & Associates Initial Quality Study of auto brands in the U.S. market. The 2013 report released last week saw Audi improve by three positions, to No. 13, compared with a year earlier and narrowly trail three brands tied for No. 10.


But more important were some other indicators in the widely regarded study which demonstrated that the Audi brand remains at the cutting edge of the premium-auto segment in the U.S. and is exceeding the industry’s pace in eliminating manufacturing defects and malfunctions.

One of the report highlights was that Audi posted the second-biggest reduction of any brand in reducing manufacturing defects, with a year-over-year improvement of 42 percent in the 2013 survey. Each of the European plants supplying cars to U.S. customers produced substantially better quality than the industry average, and the Neckarsulm, Germany, plant–which builds the crucial Audi A6, A7 and A8 models—won top honors for the best quality of any plant in the Europe/Africa region.

If J.D. Power had used the same methodology as it had in its previous method in computing results for the Initial Quality Study (IQS), Audi would have ranked second in the entire industry, which would have represented an industry-best gain of 14 positions from the 2012 rankings.

“That is the ranking in which we did exceptionally well,” Jamie Dennis, Director of Product Quality and Technical Service for Audi of America, told Audi Progress.

But J.D. Power chose the 2013 study as a “bridge” year as it transitions to a new IQS methodology that weights design issues inside the car, ranging from infotainment systems to HVAC controls, more heavily than manufacturing defects and malfunctions. J.D. Power also changed the way it conducts its survey, now by gathering all its consumer input online, and altered categories and questions.

In 2012, concept- and design-related issues accounted for only 50 percent of the Audi score in IQS. This year, concept and design factors comprised 72 percent of the overall Audi score compared with just 28 percent covering defects and malfunctions, where Audi made its greatest improvements.

Dennis said the methodology switch by J.D. Power is more critical for brands such as Audi that push the envelope to improve connectivity in their vehicles. “We’re a progressive, technology-driven brand, and so by default this new IQS methodology puts more of a focus on potential problems in areas such as infotainment,” Dennis explained.

A couple of other factors tended to hurt Audi scores in the new IQS computations but bespoke advancement by the brand that is much more significant overall than what J.D. Power’s respondents had to say.

First, Audi leads its German luxury rivals and other competitors in appealing to younger customers than the segment traditionally has been able to attract; 47.5 percent of Audi customers in the United States are in Generation X and Generation Y, compared with just 34 percent for Mercedes-Benz and just a scant 18 percent for Lexus.

And, as J.D. Power noted, younger customers tend to be tougher graders than older generations, especially in carrying higher expectations for automotive infotainment features to match the levels they perceive for smartphones and other mobile electronics.

Second, Audi has been able to achieve a higher rate of “conquest” sales – that is, luring customers away from other brands – in the luxury segment than its main rivals have been able to gain, meaning higher percentages of Audi customers are new to the brand compared with purchases of rival vehicles.

That means they have less familiarity with the controls in Audi vehicles and with how certain features operate, such as the Audi connect infotainment system. That is a significant factor in an IQS survey that measures customer satisfaction only within the first 90 days of ownership.

“Those two trends have a down side in quality surveys like J.D. Power,” Dennis noted. “But they really bode well for the future of Audi.”

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