New grading system for J.D. Power car ratings

Posted by P.W.R. in July 6th, 2008

How does a highly visible report like the annual J.D. Power initial quality scores affect important buyer considerations like value and depreciation?

It seems to vary widely. For instance, Porsches depreciate at roughly the same rate as do other high-end, high-performance sports cars–rather quickly, VW holds it’s value even though the scores are never very good, and we certainly can’t blame the fall-off-the-table depreciation of Land Rover on poor JDPower scores…it is, after all, a LAND ROVER. Not the most popular style of vehicle these days.

Surprises? Well, anytime the premium nameplate of an automaker has significantly different scores than the non-premium(?) does, it is at least worthy of notice. While Toyota and Lexus seem to rank about where one would think they would, the relationship also seems reassuring. The premium name should rank just a bit higher, shouldn’t it?

So what is up with Acura? And why does Nissan rank so far behind Infiniti?

What else…Hyundai ranks higher than Volvo, Acura and BMW. I remember when these rankings showed nameplates like Hyundai and Kia so far behind the rest of the field that it was clear that the only real selling point was the ‘100000 mile warranty’. Well, that and the MSRP was, like, 15 bucks.

The worst are further behind the norm than the best are ahead of it, so maybe another grading system is needed. How about:

A+: Porsche

A : Infiniti, Lexus, M-Benz, Toyota

B+: Mercury(!), Honda

B : Ford, Jaguar, Audi, Cadillac, Chevrolet, Hyundai, Pontiac, Lincoln

C+: Buick, Acura, Kia

C : Nissan, Volvo, BMW, GMC, Mazda, Volkswagen

C-: Hummer, Subaru

D : Scion, Dodge, Chrysler, Mitsubishi, Saab, Suzuki

F : Saturn, Land Rover, Mini, Jeep

Not too bad! A sliding scale just like in our schools, in order to injure fewer ‘feelings’.

Let’s see…Chrysler/Dodge/Jeep: OUCH Ford/Mercury/Lincoln: Good on ya! In fact, it is nice to see such strong performances from U.S. automakers.

So, are these scores reflected in important buyer issues, like depreciation? Not so much.

Perception is all when it comes to depreciation, and the (generally inaccurate) perception that the U.S. is making substandard products will likely continue until several of these fine performances are turned in consecutively.