Autos

This Is the Car Brand With the Least Loyal Customers

Car brand loyalty is important to dealers and manufacturers. When people sell or trade in a car and buy a model from another company, they basically have to be replaced to keep brand sales level. In the industry, customers who stay with the same brand when they buy a new car are called “retentions.” When a brand loses a customer to another brand, the winning car company gets a “conquest.” In a U.S. market in which as many as 17 million new vehicles are sold in a good year, the financial math for losing customers can be ruinous, and for winning them the profit consequences can be substantial.

CarMax’s recent “Upgrading Makes and Models: Exploring People’s Habits When Switching Cars” report included 2020 data on people who sold cars to the company and those who purchased a car from them at the same time. Sales were divided into several categories: convertibles, crossovers, luxury vehicles, minivans and vans, pickup trucks, sedans and coupes, sport utilities, sports cars and wagons.

One trend the researchers found was part of a movement that is a decade old. People bought fewer sedans and more sport utility vehicles and crossovers. The report noted: “4 in 10 luxury car owners switched to sports utility vehicles when trading in their car.”

The car with the worst brand retention is Mitsubishi, a brand that rarely does well on quality surveys and has only modest sales in the United States. Its brand loyalty is only 4.9%. Next lowest is Fiat, a car brand that has been dogged by poor reliability and falling sales. Its brand retention was only 8.3%. Volkswagen, the flagship brand of the largest car manufacturer in the world, had a retention rate of only 9.3%, the same as Chrysler.

The car with the best brand retention (percentage of people buying the same make as their trade-in) was Lexus at 28.1%. Lexus is the top-selling luxury brand in the United States. It usually sits at or near the top of auto research studies about quality and reliability. Lexus is the luxury division of Toyota.

Second place was taken by one of the two top-selling German luxury brands in the United States. Mercedes-Benz had a retention score of 27.8%. It was followed by Toyota at 27.3%.

These are the cars with the most loyal customers ranked top to bottom:

Source: Carmax

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