Consumer Sentiment Rises to Highest Level in Six Years

Room for Debate asks whether China’s rise as a business power would necessarily lead to an American decline.

The importance of the observer when learning quantum physics is an artifact of history.

Wheels Blog: Porsche and GMC Rank Highest in New Version of J.D. Power Initial Quality Study

Porsche The 2013 Porsche 911 50th Anniversary Edition. Porsche received top marks in J.D. Power’s revised Initial Quality Study.

J.D. Power released the results of a new version of its Initial Quality Study on Wednesday at a news conference with the Automotive Press Association in Detroit. The 2013 study was redesigned to measure better the quality of new technology that is becoming common in vehicles – including features like voice-recognition, blind-spot-monitoring, lane-departure-warning and self-parking systems.

The study scores automakers by brand and by model on the number of problems per 100 vehicles, or “pp 100.” A lower number signifies a better rating, indicating that owners have reported fewer problems for that brand or model.

The top scorers in the brand rankings were Porsche at No. 1 with a score of 80 problems per 100 vehicles, followed by GMC (90), Lexus (94), Infiniti (95), Chevrolet (97), Acura and Toyota (tied at 102), Honda (103), Jaguar (104), Hyundai, Kia and Mercedes Benz (all tied at 106). Because of the changes in the study’s methodology and content, the pp 100 scores cannot be directly compared with scores from previous years. But it is still possible to compare the brands’ relative rankings.

The redesigned study found that nearly two-thirds of the problems that owners experience with their new vehicles in the first 90 days are related to design and not manufacturing. In some cases, a component may be working as it was designed to, but can still pose a problem for the owner because it is difficult to understand or operate.

While this may seem like good news – because it involves fewer breakdowns – it is actually bad news because design-related problems are more difficult, if not impossible, to resolve.

Because design problems are not the result of breakdowns or malfunctions, the study found that just 9 percent of the problems are taken to a dealership within the first 90 days of ownership. And when they are, the problem is fixed only 13 percent of the time, whereas in the case of an actual defect or malfunction, the problem is fixed 42 percent of the time.

Many of the problems owners had with a vehicle were related to the driver’s interactions with it. These interface problems often involve voice recognition or hands-free technology, Bluetooth pairing for mobile phones and navigation systems.

What was J.D. Power’s takeaway message for consumers? When test-driving a vehicle you intend to purchase, spend as much time evaluating the technology and how easily you interact with it as you spend evaluating how well the vehicle drives, David Sargent, vice president for global automotive at J.D. Power, said in a telephone interview.

The study also found that initial quality had decreased from last year and that the decline was due mostly to technology design issues, Mr. Sargent said.

General Motors made a strong showing in this year’s survey. “GMC is second; they haven’t been anywhere near that before,” Mr. Sargent said. “Chevrolet is fifth; they’ve not been near that before. Buick and Cadillac were above the industry average.” Mr. Sargent added that they G.M. had worked “incredibly hard” to overcome its problems, noting that its recently introduced models included some, like the Buick Encore and Chevrolet Malibu, that score well on quality.

Indeed, at the news conference Mr. Sargent said that if the rated brands were combined under their parent corporations, G.M. would have a better score than any other company in this year’s study. G.M.’s trucks scored particularly well, he said.

Conversely, Nissan fell conspicuously and is now 30th out of 33 brands because of problems with three major new models — the Altima, Pathfinder and Sentra. “The competition is so tough these days, you don’t have to get much wrong to fall down in the rankings a long, long way,” Mr. Sargent said.

Ford remained in relatively the same position it has occupied for the last two years when it was hit hard with complaints about its MyFord Touch driver interface. Ford was 27th out of the 33 rated brands. Even though the interface is improving as Ford brings out updates, Mr. Sargent its inclusion in more vehicles has resulted in continued complaints.

As in years past, the Initial Quality Study surveys the owners and lessees of new vehicles after the first 90 days of ownership. This year it was based on responses from more than 83,000 owners of new 2013 passenger vehicles. Owners were asked whether they had any of 233 possible problems, which included mechanical defects and malfunctions, as well as design issues.

In this year’s redesigned study, design problems accounted for two-thirds of the total number of questions. Previously, design issues accounted for about half of the survey. For the first time, the study is conducted online, which allowed J.D. Power to get more detailed feedback on each of the problem areas.

This is the fourth generation of the study, which was begun in 1987. It was also updated in 1998 and 2006.

Bits Blog: Apple’s Peter Oppenheimer Is Highest Paid Finance Chief

Apple Peter Oppenheimer, Apple’s chief financial officer.

Being a tax ninja pays off at Apple. Its chief financial officer, Peter Oppenheimer, who has helped the company sidestep billions of dollars in taxes, was the highest paid chief financial officer of 2012, according to data compiled by Bloomberg News.

Mr. Oppenheimer was awarded a $68.6 million package, much higher than the $4.17 million that went to Tim Cook, Apple’s chief executive, says Bloomberg. Oracle’s financial chief, Safra Catz, was the second highest paid with $51.7 million; Google’s Patrick Pichette was third with $38.7 million.

Of course, all corporations do their best to minimize taxes. Apple’s Mr. Oppenheimer has done an exceptional job managing the company’s cash, finding legal ways to side step billions of dollars in taxes, allocating about 70 percent of its profits overseas, where tax rates are often much lower.

Last month, Apple’s Mr. Oppenheimer raised a bond deal of $17 billion to fund a $100 billion payout to shareholders. By borrowing money, or issuing debt, Apple avoided $9.2 billion in United States taxes.

Bucks Blog: The States With the Highest Car Insurance Rates

Associated Press Traffic headed out of New Orleans ahead of Hurricane Isaac last August.

If you want cheap car insurance rates, it’s best not to live in Louisiana. Or Michigan.

That’s according to a new analysis from Insure.com, an insurance rate comparison site.
The average annual premium in Louisiana is $2,700. Michigan is next with $2,500, followed by Georgia at $2,200. In the New York metropolitan region, Connecticut has the nation’s 11th highest average annual premium at $1,723, New Jersey is 12th at $1,697 and New York is 33rd at $1,369.

The report is based on additional analysis of data provided for Insure.com by Quadrant Information Services, which this year obtained rates for more than 750 models from six big insurers (Allstate, Farmers, Geico, Nationwide, Progressive and State Farm) in 10 ZIP codes per state. That analysis allowed Insure.com to report on the most and least expensive cars to insure, which Bucks reported on this year. Insure.com then averaged the rates for all vehicles in each state to create the state rankings. (The cars were all 2013 models.)

Rates are for a single, 40-year-old man with a clean driving record and good credit who commutes 12 miles to work daily. Policy limits were $100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident, and a $500 deductible on both collision and comprehensive coverage. The rate includes uninsured motorist coverage.

Ultimately, your own rates will vary based on your driving record, the type of car you drive and other factors, including those that have little to do with your driving history. But the comparative state rankings give an idea of how policies at the state level can affect rates over all, said Amy Danise, Insure.com’s editorial director.

In Louisiana, several factors help to drive up rates, she said. For instance, drivers injured in accidents there tend to file more bodily injury claims than do those in other states. Medical costs have been increasing, so insurers have to pay more for those claims. The state also has significant claims filed under “comprehensive” coverage, which covers damage from natural disasters, like hurricanes.

Michigan, meanwhile, is an “oddball” state when it comes to car insurance, she said, in that auto policies are required to offer unlimited medical coverage for injuries sustained in an accident. Insurers pay the first $500,000 in medical claims, and the Michigan Catastrophic Claims Association pays the rest. All policyholders pay a fee for the association. The fee is $175 per car.

“All of these costs get passed on, in one way or another,” Ms. Danise said.

Meanwhile, less urban states may benefit from overall lower rates because of less traffic congestion and lower accident rates. Maine ranks as the cheapest state, with an average premium of just over $900, followed closely by Iowa at about $1,000. “You don’t have all these cars next to each other crashing into each other,” she said.

So what if you don’t live in a state with lower premiums? You can strive to keep your own driving record as clean as possible, avoiding tickets and accidents that can raise your rates. And you can shop around. Quotes for the same driver can differ by company, she said. You can also choose a car that’s less expensive to insure. In Louisiana, for instance, the cheapest choice would be a Jeep Patriot Sport , while the most expensive would be a Mercedes-Benz S65 AMG sedan.

Do you live in a high-premium state? Do you take any special steps to help keep your premium affordable?

Auto Sales Are the Highest in 4 Years

Autos flew off the lot at the highest sales rate in four years, adjusted for seasonal variations, according to the research firm Autodata.

Over all, a total of 1.19 million cars, trucks and S.U.V.’s were sold in the United States during the month — a 13 percent increase from a year ago.

Japanese and German manufacturers led the sales boom, offsetting weaker results at General Motors and Ford.

The monthly sales rate equaled about 14.9 million vehicles on an annualized basis, and it was the highest seasonally adjusted rate since February 2008, according to Autodata.

Analysts said the robust pace was fed by consumers replacing older vehicles, the wide variety of new fuel-efficient models on the market and the greater availability of credit at low interest rates.

“The industry is continuing its comeback the old-fashioned way: with new products, better inventory management and historically cheap loans,” said Jesse Toprak, an analyst with the auto research Web site TrueCar.com.

Overall industry sales are up 14.5 percent through the first nine months of the year, compared with the same period in 2011.

Many of the gains in September came at Toyota and Honda, the two big Japanese manufacturers that suffered major product shortages after last year’s earthquake and tsunami in Japan.

“We all underestimated the strength of the Toyota and Honda brands and their customer loyalty,” Mr. Toprak said. “They have not only gained back their market share, but increased it.”

Toyota said that it sold 171,000 vehicles during the month, a 41.5 percent increase from a year ago. The company reported that sales of its Prius gas-electric hybrid cars more than doubled from last year.

Honda reported that its sales grew 30.9 percent, to 117,000 vehicles. The company benefited from high demand for its two best-selling passenger cars, the Civic and the Accord. Honda began selling a new version of the Accord in the middle of the month.

The performance of Toyota and Honda contrasted with essentially flat sales at both G.M. and Ford, partly because of tepid sales of pickup trucks.

G.M. said Tuesday that its overall sales grew by 1.5 percent during September, which the company said were its best results for the month since 2008. G.M. said it sold 210,245 vehicles; passenger cars led the way with a 29 percent gain.

But sales of the company’s pickup trucks, which are big profit producers, dropped by 20 percent during September. G.M. attributed the decrease partly to a reduction in sales to rental fleets.

A G.M. executive said the automaker was trying to keep truck inventories low as it continued to focus on introducing new cars like the Chevrolet Spark.

“Passenger cars have been the launch point for a broad and deep G.M. product offensive,” said Kurt McNeil, vice president for United States sales.

Ford said its total sales for September were down 0.2 percent from a year ago. Truck sales dropped 7.6 percent, wiping out gains made by new cars and S.U.V.’s like the Ford Fusion and the Escape.

Ford said it sold 174,000 vehicles during the month, reporting its best results in small cars, sales of which increased by 73 percent.

“Fuel economy remains one of the most important features customers want today,” said Ken Czubay, Ford’s head of United States marketing, sales and service.

Sales of the company’s top seller, the F-series pickup, grew by just 1.2 percent during September, and sales of its Lincoln luxury brand fell 3.1 percent.

One industry analyst said stock investors were betting that an uptick in housing starts would eventually fuel an increase in pickup sales.

“The most popular theme in auto land appears to be to buy companies with pickup exposure,” Brian Johnson of Barclays wrote in a research report on Tuesday.

While G.M. and Ford struggled somewhat, Chrysler continued its steady comeback from very weak sales after its government bailout and bankruptcy in 2009.

Chrysler said its September sales increased 11.5 percent from the year-ago period, its 30th consecutive month of year-over-year sales gains. The company said it sold 142,000 vehicles, and each of its brands had gains, led by an 18 percent increase at Dodge.

The company benefited from the introduction of its Dodge Dart compact sedan, the first high-mileage small car Chrysler has produced since it was acquired by the Italian automaker Fiat. It also outperformed its Detroit rivals in pickups with a 4 percent increase in sales of Ram pickups.

Chrysler’s top American sales executive, Reid Bigland, said the industry’s recovery appeared to be gaining steam in the latter part of the year.

“Going forward with our current product lineup, record low interest rates and a stable U.S. economy, we remain optimistic about the health of the U.S. new-vehicle sales industry and our position in it,” Mr. Bigland said.

Other carmakers reported mixed results during the month. Nissan said it sold 91,000 vehicles, a 1.1 percent decline from a year ago. Like G.M. and Ford, it was hurt by the resurgence at Toyota and Honda.

One of the hottest manufacturers during the month continued to be Volkswagen. The German carmaker, which is already expanding its new assembly plant in Tennessee, said it sold 48,000 Volkswagen and Audi brand vehicles in September, a 32.4 percent increase from a year ago.