While consumers consider many factors when deciding on the next car to buy, their own previous experience is perhaps the most significant one. Some car brands command high customer loyalty, while others command very little.
According to data provided by Kelley Blue Book, a car valuation company, the car brand customers own may determine what vehicle they buy in the future. A brand’s loyalty rating is determined by current owners’ intentions to buy a car of the same make again. Based on the loyalty rating of 33 car makes, these are the nine car brands with the least loyal customers.
The car makes with the most loyal customers also tend to have strong sales. Ford (NYSE: F), Honda (NYSE: HMC), and Toyota (NYSE: TM) — brands that keep at least 50% of their customers coming back on average — are also among the best selling brands in the United States. On the other side of the spectrum, brands with poor loyalty also tend to have poor sales. While the likes of Ford and Toyota all reported hundreds of thousands of unit sales in the first half of 2014, six car brands on our list reported less than 100,000 unit sales over that time.
Consumers often change brands regardless of whether their experience with a vehicle was positive or negative. Such shifts can be due to changes in the economy as well as changing preferences among consumers. Arthur Henry, senior manager of market intelligence at Kelley Blue Book, pointed out to increased fuel efficiency and higher wages for many Americans as some of the reasons SUVs, for example, have become more popular in recent years.
Henry told 24/7 Wall St. that price is perhaps the most important factor in the consumer’s decision making process when buying a car. In addition to price, Henry explained, consumers look to reliability when selecting a vehicle. “Brands that exude durability or reliability are seen as trusted brands and [are] very high in our shopper loyalty metric,” said Henry. Six of the nine makes with the worst loyalty ratings had more problems reported per 100 vehicles than the industry average of 133, according to car rating company J.D. Power’s Vehicle Dependability study.
Two makes with low brand loyalty, Jaguar and Buick, were actually rated relatively well on J.D. Power’s Vehicle Dependability study, with 132 and 112 problems reported per 100 vehicles, respectively. While Jaguar’s ratings are good and sales have actually been on the rise, Henry explained that “it is very hard for shoppers to get back into Jaguar because of the price point — [Jaguar] has the highest price point among luxury brands.”
To make matters worse, the entry luxury market is extremely competitive. Two brands — BMW and Mercedes Benz — are among the largest players in the U.S. luxury car market, which is extremely crowded. In other words, fierce competition may explain poor loyalty among some luxury brands, rather than issues of quality.
A number of manufacturers have several car brands on this list. Dodge and Chrysler, for example, are both owned by Fiat Chrysler Automobiles. According to Henry, consumers are largely aware of this. “Shoppers do understand the concept that those two makes are together,” and because they are aware of this, they may leave a brand, yet still knowingly buy a car made by the same manufacturer. On the other hand, they may leave the manufacturer altogether after a bad experience with one brand.
24/7 Wall St. reviewed Kelley Blue Book loyalty data on 33 car makes over the last two-and-a-half years. Kelley Blue Book provided the percentage of car owners in each quarter since the beginning of 2012 planning to buy a vehicle of the same make again. To find the brands least able to retain their customers, we took an average across each quarter through the second quarter of this year. Kelley Blue Book also provided total unit sales for each car make. Quality measures came from J.D. Power’s Automotive Performance & Design (APEAL) study, which measured satisfaction after 90 days of ownership on a 1,000 point scale, and from J.D. Power’s Vehicle Dependability Study, which measured the number of complaints by make per 100 vehicles for new owners as well as those who have owned a vehicle for three years.
These are the vehicle brands that can’t keep customers.