New-Vehicle Appeal in China Remains Flat for a Third Consecutive Year, While Vehicle Initial Quality Continues to Improve

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General Motors Corporation Brands Receive Three China APEAL Segment Awards

SHANGHAI: 27 November 2009 - Although automakers in China have made considerable strides in improving new-vehicle quality during the past three years, owner satisfaction with new-vehicle performance and design have remained flat during the same time frame, according to the J.D. Power Asia Pacific 2009 China Automotive Performance, Execution and Layout (APEAL) StudySM released today.

Now in its seventh year, the APEAL study is a customer-reported measure of what gratifies owners in China regarding their new vehicle's performance and design during the first two to six months of ownership. The study examines nearly 100 attributes in 10 vehicle categories: vehicle exterior; vehicle interior; storage and space; audio/entertainment/navigation; seats; HVAC; driving dynamics; engine/transmission; visibility and driving safety; and fuel economy.

The China automotive industry has been undergoing considerable and rapid change recently, as the number of manufacturers and models in the market has grown expansively and manufacturers have attempted to respond to increasing demand. However, despite these changing market conditions, overall owner satisfaction with new-vehicle performance and design has remained flat for the past three years. In 2009, the overall APEAL score averages 799 on a 1,000-point scale, compared with 800 in 2008 and 797 in 2007. In contrast, according to the J.D. Power Asia Pacific 2009 China Initial Quality Study,SM new-vehicle initial quality in China has improved substantially between 2007 and 2009-by 24 problems per 100 vehicles.

"Rapid evolution of the automotive industry in China has led to intensified competition and heightened customer expectations," said Katy Wang, senior research manager at J.D. Power Asia Pacific, Shanghai. "While manufacturers in China have made substantial quality improvements, they will need to put additional effort into product innovation in order to keep pace with these expectations and increase owner satisfaction."

General Motors Corporation brands receive three segment model awards-more than any other company in the study-for one Buick model and two Chevrolet models. Among nameplates, Honda and Nissan models receive two awards each, while Audi, JAC and Wuling models each receive one award.

The highest-ranked models by segment in 2009 are:

Compact segment: Chevrolet Spark

  1. Premium compact segment: JAC Tojoy
  2. Entry midsize segment: Nissan Tiida
  3. Midsize segment: Nissan Sylphy
  4. Lower premium midsize segment: Chevrolet Epica
  5. Upper premium midsize segment: Buick Regal
  6. Luxury segment: Audi A6L
  7. SUV segment: Honda CR-V
  8. MPV segment: Honda Odyssey
  9. Minivan segment: Wuling Rongguang


Among the 10 segments included in the study, the APEAL score average for the compact vehicle segment declines most notably from 2008, down by 22 points in 2009. Fuel price increases introduced in 2009 have created more discerning and demanding customers in the compact vehicle segment, as car buyers have sought more economical options. For the most part, customer satisfaction with models in this segment has decreased from 2008 due to relatively low satisfaction with engine performance, internal space, vehicle exterior and fuel efficiency.

"Automakers that build and sell models in the compact segment often pursue cost reductions in building these vehicles in order to increase profit margins, but a balance needs to be achieved between managing production costs and providing pleasing vehicle features and technologies," said Wang. "In order to continue to attract new-vehicle buyers and truly satisfy owners, manufacturers should focus on making improvements in the areas of seat comfort, entertainment systems, engine power and fuel efficiency. According to our research, improvements in these areas would have the greatest positive impact on overall new-vehicle appeal."

The study finds that providing high levels of new-vehicle appeal has a strong positive impact on owner advocacy and loyalty. Among owners with the highest levels of satisfaction (scores averaging 884 or higher), 53 percent say they "definitely would" recommend their vehicle model to others and 26 percent say they "definitely would" repurchase the same brand. These levels decline to 29 percent and 12 percent, respectively, among owners with lower satisfaction (scores averaging between 799 and 883).

"Creating highly appealing models not only drives recommendation and loyalty rates, but vehicle models with high APEAL scores may benefit from faster sales turnover, less need for cash incentives and higher profit margins on each vehicle sold," said Dr. Mei Songlin, research general manager at J.D. Power Asia Pacific, Shanghai. "Building a strong brand image begins with producing models that truly satisfy owners."

The 2009 China Automotive Performance, Execution and Layout (APEAL) Study is based on evaluations by 12,038 new-vehicle owners who purchased a new passenger vehicle between October 2008 and June 2009. The study was fielded between April and August 2009 in 28 major cities across China.

About J.D. Power Asia Pacific

J.D. Power Asia Pacific has offices in Tokyo, Singapore, Beijing, Shanghai and Bangkok that conduct customer satisfaction research and provide consulting services in the automotive, information technology and finance industries. Together, the five offices bring the language of customer satisfaction to consumers and businesses in China, India, Indonesia, Japan, Malaysia, Philippines, Taiwan and Thailand. Information regarding J.D. Power Asia Pacific and its products can be accessed through the Internet at http://www.jdpower.com/. Media e-mail contact: helen_rong@jdpa.com.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, Platts, Capital IQ, J.D. Power and Associates, McGraw-Hill Construction and Aviation Week. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at http://www.mcgraw-hill.com/.

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