J.D. Power outlines revamped residual value offering
The evolution stemming from J.D. Power’s acquisition of NADA Used Car Guide from the National Automobile Dealers Association first announced nearly two years ago reached another major development on Wednesday.
What the company described as insightful analysis of its automotive retail and auction transactional data plus its customer survey data is serving as the foundation of J.D. Power Residual Values — a benchmark product debuting now officials say will bring a new perspective to vehicle residual values.
Designed as an information resource for vehicle manufacturers, captive finance companies and other institutions, officials explained their Residual Values incorporates sales transaction data gathered by:
—The Power Information Network (PIN) from J.D. Power, representing more than 40 percent of franchised dealer retail sales transactions in America.
—The J.D. Power/National Auto Auction Association AuctionNet service, accounting for more than 80 percent of automotive auction transactions.
—Proprietary J.D. Power Voice of the Customer data.
The company went on to emphasize the uniqueness of Residual Values is further complemented by data from J.D. Power’s Initial Quality Study (IQS); Vehicle Dependability Study (VDS); Automotive Performance, Execution and Layout (APEAL) Study; and Auto Avoider Study.
“We are launching this capability at a particularly important time for the industry as it deals with record levels of lease origination in an environment of declining used vehicle prices. Automakers — and their lenders — are looking for ways to accurately forecast and enhance the residual value of their vehicles because of its direct impact on both sales and profitability,” said Deirdre Borrego, senior vice president of data and analytics at J.D. Power.
The company noted residual values is the first all-new product introduced under the newly created Data & Analytics Division of J.D. Power. Under Borrego’s leadership, the division will include J.D. Power Valuation Services, formerly known as NADA Used Car Guide, joining the successfully established operations of PIN and Online-to-Offline (O2O) Digital Marketing Analytics.
J.D. Power Valuation Services will produce, manage and distribute residuals and related services. Mike Stanton, vice president of valuation services, will lead the team in McLean, Va., as it continues to market NADA Values until it fully transitions to the J.D. Power brand.
“Manufacturers rely on J.D. Power insights in so many other areas of their business, so it makes a lot of sense to support them in such a critically important function that has long-term financial implications,” said Jonathan Banks, vice president of vehicle valuation and analytics at J.D. Power and a staple presenter during Used Car Week.
“What OEMs and captives will find unique is the transparency of the valuation,” Banks continued. “Our product will provide clients with a viable third-party source as a challenger model to current processes, with an opportunity to expand into more predictive and prescriptive analytical solutions.”