Consumer Group Lambasts JD Power Conclusions

By Scott Doggett April 29, 2011

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The Consumer Federation of America, an association of nearly 300 nonprofit organization that advance consumer interests through research, advocacy and education, has a beef with J.D. Power and Associates regarding a study the global marketing information firm made public earlier this week. Interestingly, the CFA doesn't disagree with the information J.D. Power presented, but rather it lambasts the firm's interpretation of it.

In a statement released today, the federation criticized the "erroneous conclusions" drawn by J.D. Power on the future of plug-in vehicles. Referring to J.D. Power's 2011 U.S. Green Automotive Study on the adoption of hybrid, plug-in hybrid, battery-electric and clean-diesel vehicles through 2016, the CFA said the firm "totally mischaracterized the data."

J.D. Power concluded that the information for the study it says it gleaned from the firm's "primary consumer research, social-media intelligence, forecasting and transactional sales data," painted a dismal future for plug-in vehicles, with "relatively few consumers" willing to buy them or conventional hybrids and clean-diesel vehicles. CFA, which focused solely on the plug-in information contained in the study, concluded the information "actually indicates electric vehicles are poised to become a major player in the U.S. auto market."

Both CFA's examination of the sales of electric-drive vehicles over the past decade and J.D. Power's projections for their future sales, indicate that American consumers will buy more than a million plug-in vehicles over the next five years. J.D. Power concluded that this number would represent a setback with regard to American acceptance of electrified vehicles. But the CFA, looking at the same data, concluded that 1 million plug-in vehicles on U.S. roads five years from now would be an enormously positive development, as we at AutoObserver believe it would.

To put a million plug-in-vehicle sales in perspective, the top-selling car in the U.S. last year was the Toyota Camry with 327,804 models sold, the CFA noted. If 1 million plug-in vehicles are sold over the next five years, as the J.D. Power data suggest, then on average American's will purchase 200,000 plug-in vehicles per year during the half-decade -- easily making them among the most popular models in the aggregate, the CFA noted. To shed a little more light on that number, two of America's hottest-selling models -- the Toyota Corolla and the Honda Civic -- had U.S. sales of 266,000 and 260,000 units, respectively, last year.

Mark Cooper, director of research for CFA, said in the statement that consumers today are more concerned than ever before about rising gas prices and with over 100 new plug-in models set to hit the market over the next five years, fuel efficient plug-in hybrid and battery-electric vehicles are not only likely to grab a growing market share, they will also pressure automakers to produce increasingly efficient conventional gasoline vehicles.

The Toyota Prius, the world's most popular hybrid vehicle, saw record sales in the first few months of 2011 and recently passed the 1-million-units-sold mark in the United States. "If today's electric and hybrid vehicle naysayers had had their way, the Prius would have never made its way from the Tokyo Motor Show into a million U.S. driveways," Jack Gillis, CFA director of public affairs, said in a statement.

This year, average household expenditures for gasoline are projected to exceed $2,800, which would represent the largest annual expenditure ever. Cooper noted that Americans are now spending as much to drive cars as they spend on the energy needed to power their homes. Adopting new technologies and improving the fuel economy of passenger vehicles is the best insurance consumers will ever have against rising gasoline prices, Gillis said.

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