Led by Fin­barr O’Neill, J.D. Power seeks to strengthen China’s auto in­dus­try with data an­a­lyt­ics

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

Prospec­tive car-buy­ers typ­i­cally check out hun­dreds of re­views be­fore mak­ing up their mind. Fin­barr O’Neill, CEO and pres­i­dent of J.D. Power, wishes to stream­line things for them.

O’Neill leads a data an­a­lyt­ics firm that works with all tiers of auto brands that you can prob­a­bly think of. It aims to pro­vide cus­tomers in­de­pen­dent and un­bi­ased rat­ings on cars.

J.D. Power’s solid re­search on car per­for­mance, de­sign and de­pend­abil­ity is sought af­ter by main­stream me­dia out­lets, and is fast be­com­ing con­sumers’ trusted, if not the only, source of cred­i­ble, re­li­able in­for­ma­tion that could help de­cide which ve­hi­cle to buy.

O’Neill, who started out three decades ago as a le­gal coun­sel at Toy­ota Mo­tors Sales in the United States, un­der­stands the power of per­cep­tion in shap­ing cus­tomer pref­er­ences.

“My in­tro­duc­tion to the au­to­mo­tive in­dus­try was through ad­dress­ing a chal­lenge of a brand im­age. So I learned quickly that the most im­por­tant thing was the voice of the cus­tomers be­cause that de­ter­mines the fu­ture, whether it’s au­ton­o­mous ve­hi­cles or new en­ergy ve­hi­cles,” he said.

Once a sub­sidiary of McGraw Hill Fi­nan­cial, also the par­ent of Stan­dard & Poor’s rat­ings agency, J.D. Power was taken pri­vate last Septem­ber by pri­vate eq­uity firm XIO Group, giv­ing it more flex­i­bil­ity and re­sources to fo­cus on its core tasks of data an­a­lyt­ics and cus­tomer re­search.

O’Neill sees the spinoff as a win­dow of op­por­tu­nity to turn the busi­ness-to-busi­ness com­pany into a cus­tomer-aware brand. As part of a re­vamp plan, he trans­formed the firm from an old-fash­ioned, mail­ing ser­vice provider to an out­fit that reaches con­sumers through dig­i­tal means like so­cial me­dia.

“Be­cause the con­sumers are liv­ing in a more mo­bile-con­nected world, it’s im­por­tant for us to reach them in a va­ri­ety of ways. Con­sumer be­hav­ior is chang­ing; we need to go where the con­sumers go,” he said.

From the very lat­est in­dus­try an­a­lyt­ics and rank­ings to study high­lights via so­cial me­dia and in-per­son round­tables and con­fer­ences, O’Neill steers the wheel of a com­pany that cap­tures the opin­ions and per­cep­tions of mil­lions of cus­tomers from across the globe.

The di­ver­gence in con­sumer at­ti­tudes as ex­em­pli­fied in many of J.D. Power’s stud­ies pro­vides in­sights to au­tomak­ers, which the lat­ter use to fine­tune their strate­gies and prod­ucts for suc­cess in the mar­ket.

For in­stance, ac­cord­ing to the firm’s China Ini­tial Qual­ity Study pub­lished last year, un­pleas­ant in­te­rior odors have topped the list of com­plaints by Chi­nese emerg­ing mo­tor­ing class, while that very leath­ery and sweet smell is some­thing that their Amer­i­can coun­ter­parts crave in new cars.

In 2009, China raced past the US for the first time to be­come the world’s largest auto mar­ket, thanks to gov­ern­ment in­cen­tives. The larger plan was to counter the global eco­nomic slow­down.

The past decade has wit­nessed changes not just in the size of cars but in their qual­ity, said O’Neill, re­call­ing his first trip to the Bei­jing Auto Show in 2008.

“Back then, you fig­ured a clear dif­fer­ence be­tween do­mes­tic ve­hi­cles and those of the joint ven­tures, from the met­als and plas­tics they used. Now, all of these have gone away — there had been a rapid im­prove­ment in man­u­fac­tur­ing ca­pa­bil­ity,” he said.

That, ac­cord­ing to O’Neill, has given much weight to Chi­nese pref­er­ences, which are in some cases be­com­ing global stan­dards.

For in­stance, China’s lux­ury sedan mar­ket has some pe­cu­liar­i­ties of its own, like the pref­er­ence for more legroom and spa­cious back­seats. The world’s lead­ing OEMs (orig­i­nal equip­ment man­u­fac­tur­ers) are cus­tomiz­ing new mod­els to suit lo­cal tastes.

Also, the in­creas­ingly so­phis­ti­cated Chi­nese mo­torists have set high stan­dards for con­nec­tiv­ity in au­to­mo­biles. The surge in smart­phone us­age is turn­ing the coun­try into the big­gest telem­at­ics mar­ket on the planet, with com­pa­nies look­ing to get a piece of the riches on of­fer.

That has called for more press­ing needs for pro­fes­sional ser­vices like those of­fered by J.D. Power, es­pe­cially as more new en­ergy ve­hi­cles hit the road and their sales ap­pear poised to pick up as the mar­ket ma­tures.

While the ini­tial cus­tomer con­cern would be anx­i­ety over run­ning out of gas in the mid­dle of nowhere, what comes next is a ques­tion of price, in the ab­sence of gov­ern­ment sub­sidy, he said.

“But I see China as a leader in this area. The scale in China will drive in­no­va­tion around bat­tery tech­nolo­gies here in China. In the next decade, the cost of bat­tery will come down, mak­ing elec­tric ve­hi­cles rel­a­tively easy to pro­duce,” he said.

China cur­rently con­trib­utes to 15 per­cent of the com­pany’s global rev­enue. O’Neill is op­ti­mistic the fig­ure will grow as the firm ex­pands be­yond tra­di­tional auto ser­vices into re­tail bank­ing and in­sur­ance.

“China is per­haps the most con­nected coun­try in the world. We’ ll be able to look at that trend and try to un­der­stand po­ten­tial op­por­tu­ni­ties by watch­ing how Chi­nese con­sumers change be­hav­ior over time,” he said.

More op­por­tu­ni­ties lie ahead as Chi­nese au­tomak­ers are set to be­come global play­ers vy­ing for a mar­ket share over­seas, he said.

“The per­cep­tion of brand is im­por­tant so we can work with Chi­nese com­pa­nies to un­der­stand not only how one es­tab­lishes a net­work over­seas, but how one de­signs a car to suc­ceed in the mar­ket. You only get a chance to launch once and you cre­ate a per­cep­tion,” he said.

con­tri­bu­tion of China unit to J.D. Power’s global rev­enue in 2015 and 2016

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