NAUMAN l Adaptability is key, J.D. Power says

He pointed to a huge change in the packaged-goods industry as an example of where the auto business is going.

In the old days, he said, companies such as Procter & Gamble had a huge staff with ‘‘muscle’’ that could get detergents and toothpastes prominent spots on store shelves. But, once Universal Product Code labels and computer scanning were introduced, stores simply began ordering what customers were buying, not what P&G and others wanted them to buy.

Nowadays, at Wal-Mart Stores’ headquarters in Arkansas, P&G keeps 25 people there just to monitor numbers and match products with sales demand.

‘‘That’s what’s happening in the auto industry,’’ Power said.

The availability of instant information — from what kind of equipment customers are ordering to how much they’re paying for it — is changing the dynamic.

Still, he said, some factions — he mentioned unions, the government and ‘‘old-line’’ auto executives — continue to resist the changes.

Changing relationships

The rise of the Internet was once seen as making auto dealers obsolete. That didn’t happen, he said. Instead, it changed the relationship between customers and dealers, and, more profoundly, the one between dealers and automakers.

More than 15 years ago, Power predicted huge, sweeping changes in the auto industry. He mentioned increasing globalization, improved quality, more model choices and the growing influence of computerbased information.

‘‘Timing is everything,’’ he noted. And the maxim that the impact of new technologies is overestimated in the near term and underestimated in the long term is true, he said.

Power has spent nearly 50 years in the car business, although his eponymous company now rates everything from computer printers to hospitals. About 30 percent of its profit is from international sales, and it now has offices in China and India. Another 30 percent of its profit is from non-auto accounts. Power makes most of its money selling its survey details and by allowing its name to be used in advertisements.

He started with Ford Motor, as a financial analyst in its tractor division, ‘‘and I helped them get out of that business.’’

He then moved to a marketing agency that had the GMC and Buick accounts.

In 1968, he founded his own firm, J.D. Power and Associates. The next year, he moved from Michigan to California.

His first client was Toyota, but getting the deal required a lunch at a Japanese restaurant with the Japanese staff because the automaker’s American staff wouldn’t talk to him.

Global enterprise

From those early days, when his wife and family did much of the office work, Power has seen his company grow to 750 employees and 12 offices around the world.

In April, Power sold the company to McGraw-Hill, which publishes textbooks, owns Standard & Poor’s and counts Business Week among its titles.

He remains chairman. So far, he said, ‘‘I’m very happy with what’s going on’’ with McGraw-Hill.

His company defines automotive quality with its annual surveys of short- and long-term vehicle quality, and rates dealers and automakers on how well they serve customers. Quality differences still exist, he maintains. But major improvements over the past two decades have narrowed the gap between first and worst.

Looking forward, it will be things like smart design and new features (which Power calls ‘‘things gone right’’) as well as customer satisfaction that will separate automakers.

Now 74, Power shows few signs of slowing down. He spoke without notes, stood up and answered questions for an hour and then headed for a late-night flight back home to Los Angeles. Contact Matt Nauman at mnauman@mercurynews.com or (408) 920-5701.