Car buyers consider many factors when purchasing a new car, but perhaps their own previous experience is the most significant one, according to data released by Kelley Blue Book, a car valuation company. If consumers intend to buy the same brand they currently own, that brand has managed to create loyal customers. Some car brands command high customer loyalty, while others command very little.
A brand’s loyalty rating is determined by the current owners’ considerations when purchasing a new car. In the case of top-selling brands such as Toyota and Ford, more than 50% of the brand’s existing customers appeared were considering sticking with the same make in 2015. On the other hand, less than a quarter of Infiniti owners shopping for a new car appeared interested in another Infiniti. Based data provided by Kelley Blue Book on consumer shopping related to 32 car makes, these are the 10 car brands with the least loyal customers.
A review of car sales shows the importance of this metric. Ford, Subaru, and Toyota — brands that retain at least 50% of their customers, on average, from one car purchase to the next — are also among the best selling brands in the United States.
In an interview with 24/7 Wall St., Kelley Blue Book analyst Arthur Henry explained that loyalty and sales often go hand in hand. While good reviews are important for a new model, loyalty also has an impact on sales. “But what we see from our loyalty metric is that if people are more familiar with a brand, they’re more likely to be interested in buying a new model,” Henry said. He added that brands with fewer loyal customers are less likely to see a significant sales boost from a new model, even a well-reviewed one.
Of the 10 brands with the highest customer loyalty, eight are among the 10 top-selling brands for 2015. None of the brands with poor loyalty, on the other hand, are among the 10 top-selling brands for 2015, and six sold less than 100,000 in 2014. Comparatively, brands such as Ford, Chevrolet, and Toyota sold more than 2 million units each in the United States last year.
The reasons customers can be loyal to a car brand may be successful marketing or family tradition, but often it is their own experience with the car that plays a big part in the decision. JD Power’s Automotive Performance, Execution and Layout Study measures the quality of the new car experience. Mitsubishi, for example, which has one of the worst loyalty ratings, also has the third worst APEAL score. The majority of the vehicles with poor loyalty also rate below average for their segment.
Many of these brands have more technical problems than the average of 147 reported per 100 vehicles. Customers of poor-loyalty brands such as MINI and Dodge reported more than 190 problems per 100 vehicles. On the other hand, “brands like Toyota and Honda have done really well.” Henry said. “People say they’ve had an awesome or great experience with the brand, so they’re likely to reconsider the brand with their next purchase.”
24/7 Wall St. reviewed Kelley Blue Book (KBB) loyalty data on 32 car makes over the past three-and-a-half years. KBB provided the percentage of car owners in each quarter since the beginning of 2012 considering buying a vehicle of the same make again. Kelley Blue Book also provided total U.S. 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 reported by new owners as well as by those who have owned a vehicle for three years.
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