Gerardo Gomez – Country Manager JD Power & Associates

If your kid came home with a 99.7 average on that measure of quality known as a report card, you might start singing something like "Glad All Over."

A few decades ago, key players in the auto parts sector would have been proud at 997,800 good parts per million.

In 2013, those key players know it had better be no more than a single digit of bad from all that are good. Otherwise, the company may disappear.

Watching the auto industry over the
past 35 years one sees the progression:
reliability, quality, satisfaction, excellence.
Customers demand more; they hadbetter get more. Today customer loyalty operates in a different environment. With around three dozen global manufacturers producing on a larger scale, customer loyalty cannot be assumed. After all, just one nagging problem and the customer's next visit may just take place in someone else's showroom.

JD Power & Associates operates in a world of consumer research. Their vehicle ratings based on "voice of the customer" carry clout.

Gerardo Gomez, country manager for JD Power & Associates, Mexico, also knows customer perceptions may vary from country to country:

JD POWER & ASSOCIATES IS VERY MUCH ASSOCIATED WITH PEOPLE'S PERCEPTIONS OF QUALITY. THIS IS THE WORLD OF CUSTOMER SATISFACTION. BUT HOW DOES ONE BETTER DEFINE CUSTOMER SATISFACTION?

Satisfaction is the difference between the performance of what you are providing to the customers and their expectations. That difference is becoming that customer satisfaction.

IN THE SENSE OF MEXICO, HOW HAS THE SURGE IN VEHICLE PRODUCTION AND SALES CHANGED THE SITUATION CONCERNING SATISFACTION AND QUALITY PERCEPTIONS?

The Mexican people are a little different from the Brazilian or the U.S. people. The Mexican people are more focused on the appeal, the attractiveness of the vehicle more than the other factors like the service or the rational things such as the cost of ownership. The main things driving the satisfaction are, "How I like my vehicle," "What I like from my vehicle." Quality is just a given right now.

The customer now is getting more confi dent, the economy is getting stronger and that is driving sales in Mexico. That satisfaction is playing a big role. All the technology and the social media are helping them to have more information. We have a challenge in the auto industry because we are fi nding more informed customers who are more demanding. That's the kind of thing that OEMs have to worry about with the customers.

WHAT CHANGES DO YOU SEE IN THE SOPHISTICATION OF THE CONSUMER IN MEXICO THAT YOU DID NOT SEE 15 OR 20 YEARS AGO?

They are becoming more globally oriented. They have more access to a lot of information from around the world. This is a key driver now. In the past when you were buying a car, you were only referring to your friends or family. You had all the comments and feedback from them but now you can go directly to the computer and have feedback from any part of the world.

The people are more conscious about it. Now, in Mexico they know that they have the power in selection because there is a lot of competition out there. They can have anything they want from all around the world. That's a big change.

JD POWER & ASSOCIATES TAKES A LOOK AT QUALITY ALWAYS EXAMINING THE OUTPUT. WHAT ARE YOU SEEING AS WE HAVE A VERY STRONG IF NOT EXPLOSIVE GROWTH OF AUTOMOTIVE COMPONENT PLANTS AND THE BUILD SITES FOR FINAL ASSEMBLY IN MEXICO?

Gomez: As you know JD Power & Associates has a lot of studies done on the automotive industry. One of them is the IQS Study, Initial Quality Study that takes the quality perception from all the customers in the fi rst 90 days of ownership. We rank all the details from the quality that we have. We have more than 250 problems identifi ed and we go with each customer with their problems. With that we rank all the brands, all the manufacturers, as well as all the plants. We make a differentiation between the kinds of problems. When we ranked the plants this year, the plant award was for a plant in Japan. Our top ranking plant in Mexico plant is at about 20th. We have some room to grow there. The quality is there but we have to keep improving on that side.

BASED ON YOUR EXPERIENCE HOW RESPONSIVE ARE THE PLANTS TO CUSTOMER FEEDBACK, HOW RAPIDLY DO THEY MAKE CHANGES?

We have all kinds of different OEM clients. The OEMs that are well received or well ranked are very happy with the study. The ones that are low ranked sometimes try to justify their activities. Somehow their internal (measurements) are always very, very good but on the other hand they don't consider the voice of the customer. They are not taking into consideration what are the customer's expectations. The Mexican culture is getting more able to provide more feedback in more subjective terms.

WHAT IS THE RELATIONSHIP BETWEEN SATISFACTION AND MAINTAINING BRAND LOYALTY?

The Mexicans are not very loyal. The loyalty in Mexico is about 40 percent of industry levels. That's a thing that OEMs have to capitalize, to work on that. This is an industry in a country of 115 million people, and you are only selling 1 million vehicles. If you take out all the fl eet (institutional sales) part, maybe you have around 600,000 vehicles. It is less than half a percent of people who have a chance to buy a car.

When you have the money, you can decide whatever you like more. That brings me back to the other point, the feel of the vehicle. They are going to buy whatever they like more when they have the money. We don't have a lot of people coming back to buy cars. Out of 70 million people that are in the driving age, it's a very, very limited group that can buy, but they can buy anything they want.

LET'S TAKE A LOOK TO THE FUTURE. THE FORECAST POINTS TO MORE VEHICLES BEING PRODUCED ANNUALLY IN MEXICO, STATISTICS INDICATE THE MEXICAN MARKET DISPOSABLE INCOME IS THERE OR GROWING. WHAT DO YOU SEE IS LIKELY TO CHANGE IN TERMS OF CUSTOMER SATISFACTION REQUIREMENTS OF TODAY VERSUS SIX OR SEVEN YEARS FROM NOW?

Mexico is becoming more important as a hub exporter. It is getting really, really strong, a key country to be in for labor and quality. That helps a lot to support the growth in the neighboring country, on the North American side. The thing here locally is that we have just developed product specifi cally for Mexico, not any adaptation. That will drive the real growth. Of course that also has to be supported by the infrastructure that has to be built, as well a stable economy that continues growing.