Car advice: Who do buyers trust most?

By Alex Taylor III, senior editor at large

FORTUNE -- Unlike almost any other industry you can think of, the auto industry gushes public information. In any given month, an interested consumer can find out exactly how many units of his favorite car model have been sold, how much they sold for, and how that compared with competing makes in the same category.

Try doing that with flat-screen TVs, wristwatches, or running shoes. Industry sales by product line is valuable competitive intelligence and usually isn't publicly available.

Car buyers can also benefit from an avalanche of surprisingly candid insight into the car business from knowledgeable and independent third-party sources. In just the past week, for example, Consumer Reports magazine released its annual study of vehicle reliability and delivered a stinging assessment of the quality of German luxury cars. Audi, BMW, and Mercedes, it said "are among the worst automakers overall in terms of reliability."

Then came J.D. Power, the industry scorekeeper. It took note of the publicity surrounding the debut of the Chevy Volt and Nissan Leaf and declared that the future market prospects for hybrid and battery electric cars "may be over-hyped."

Not to be outdone, weighed in with a review of the 2011 Volkswagen Jetta, the spearhead of VW's drive for U.S market share. Edmunds informed the 15 million readers that come to its web site every month that the Jetta's interior quality was disappointing, its throttle response was slow, and the steering was numb.

In recent weeks, the amount and quality of the information has amped up as the Big Three of industry intelligence engage in some intramural jousting for consumer share of mind and overall bragging rights., which reports a 23% annual growth in site traffic over the past ten years, has begun poaching on J.D. Power's territory by offering forecasts of monthly car sales, accompanied by instant analysis as the sales come in.

CEO Jeremy Anwyl says the information is provided as "a courtesy," but exactly how that benefits the car shoppers Edmunds is trying to serve is unclear. What it does do is raise Edmunds' profile in the industry and increase its data-collecting capability.

"We are generally aware of what Edmunds is doing," says Dave Sargent, vice president, Global Automotive, J.D. Power. "We're friendly rivals, so to speak. We know they are gathering data and, like us, will look to see how they can best provide value to their clients from this."

Consumer Reports, meanwhile, is making greater efforts to get the word out about its comprehensive vehicle assessments by publicizing newsy bits, releasing information ahead of the magazine's publication, and redesigning its web site to make data more accessible.

Says Tom Doll, executive vice president, Subaru of America: "Our customers tell us that Consumer's is a particularly valuable source for research during the buying process."

While their interests are converging, each of the Big Three has a different business model and sharply different antecedents:

J.D. Power and Associates

Starting in 1968, J.D. Power and Associates has pioneered third-party assessments of the industry with surveys of customer satisfaction, new-car quality, and long-term dependability. The firm's founder, former Ford analyst Dave Power, got his first big break when Toyota, which had just opened a sales office in Torrance, Calif., hired him to do market research. Power made a name for himself in 1970 when he identified serious problems with Mazda's rotary engine.

Not until the mid-1980s was Power able to sign up any of the Detroit automakers. They tended to fare poorly in his surveys and complained about their techniques. That declined as Power became more established and its own performance improved.

Now owned by McGraw-Hill, Power offers research data and consulting services to manufacturers and dealers on how to improve product quality and customer satisfaction and has managed to avoid being associated with any one company or brand.

The new kid on the block, has been the most aggressive in expanding its reach and strengthening its ties with car buyers. Edmunds started in 1966 with a printed booklet of auto specifications. The print product is now obsolete, and the company derives 100% of its revenue from online ads by manufacturers and dealers, which are becoming more closely targeted.

By capturing buyers' traffic patterns through behavioral targeting as they search its site, it can serve up an ad campaign to connect them with local dealers. Edmunds is in the process of launching an update of its website that will include information on dealer inventory, so buyers can identify the precise vehicle that they are looking for.

Besides new and used car prices, Edmunds' website provides information on incentives and rebates, as well as test drive reviews by staffers. To boost traffic, Edmunds launched Inside Line, a site for enthusiasts in 2005, and CarSpace, a social networking site for car buffs, in 2006.

Consumer Reports

At a time when many magazines are struggling, Consumer Reports continues to thrive. Its print and online editions share a combined 7.3 million subscribers, up 31% from 2004.

No factory-prepared press cars find their way into the hands of Consumer Reports' famously fussy testers, who insist on buying their own vehicles on the open market to maintain their objectivity. But they frequently get an advance peek at new models from manufacturers who make the trek to CR's test track in remote Eastern Connecticut to seek its counsel.

Since Consumer Reports is non-profit and doesn't accept advertising, it can afford to stand a bit aloof from its more capitalistic competitors. But if Edmunds continues to grow and expand its product evaluations, CR may begin to see its influence eroded. Likewise, Power may have to deepen its connection with consumers beyond its quality and reliability surveys in order to keep up with Edmunds

To the extent that this industry infighting makes car buying more transparent, the winner will be the customer. With 1,300 different vehicles for sale in the U.S, more data can only make the sorting-out process smarter and easier. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Find Your Next Car
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET


Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.