Hyundai tops in U.S. customer retention for 2011, Power says
DETROIT -- Hyundai had the highest customer retention rate last year among automotive brands in the United States, beating industry leaders Ford and Honda, according to a new study released today.
Last year, 64 percent of the new vehicles Hyundai sold or leased were bought by existing owners, J.D. Power and Associates said in its ninth-annual Customer Retention Study.
Hyundai jumped two spots in the rankings from 2010, when it retained 60 percent of buyers.
Honda and Ford -- tied for No. 1 in 2010 with a customer retention rate of 62 percent -- tied for second place last year, both earning a 60 percent retention rating, J.D. Power said. They were followed by BMW, Kia, Toyota, Chevrolet, Mercedes-Benz, Lexus and Cadillac.
Jeep, Nissan, Mini and Ram also finished above the industry's average retention rate last year of 49 percent.
J.D. Power said Hyundai's high retention rate was driven mostly by the popular Elantra and Sonata models.
"Hyundai's increased retention rate is shaped by its expanding model lineup, as well as the fact that perceptions of the brand's quality and appeal have continued to improve during the past decade," Raffi Festekjian, director of automotive product research at J.D. Power and Associates, said in a statement.
Jeep had the largest increase in customer retention -- jumping by 17 percentage points to a 51 percent retention rate.
Saab, Suzuki and Dodge ranked the lowest in customer retention in 2011.
Suzuki fell the farthest -- seven spots -- with a retention rate of 20 percent last year, down from 31 percent in 2010.
Of the 33 brands included in the study, 19 improved customer retention rates compared with 2010 while 14 declined.
A desire for different features prompted many new-vehicle buyers to switch brands, J.D. Power said.
According to the study, 33 percent of new-vehicle buyers who switched brands said their previous vehicle didn't offer the features they wanted.
Other reasons for dissatisfaction with a vehicle included high ownership or maintenance costs, too many problems or insufficient resale value.
"Many automotive brands are expanding their array of models in an attempt to capture more buyers, but this isn't enough in and of itself," Festekjian said. "Manufacturers need to integrate specific attributes and features that delight vehicle owners to maximize their opportunity to both retain customers and conquest from other brands."
J.D. Power looked at more than 117,000 responses from new-vehicle buyers and lessees, of which more than 73,000 were replacing a vehicle they had purchased new. The study was conducted between February and May 2011 and again between August and October 2011.Besides customer retention, the study also looked at the rate at which brands capture customers from competitors -- what J.D. Power calls "conquesting."
The study also found that women and younger owners are less likely to choose the same brand for their next purchase, compared with men and older owners.
Women and younger owners are more likely to experience lifestyle changes, such as growth in household size or income swings, that would prompt them to purchase vehicles, Festekjian said.
Brands that did a better job of retaining female customers last year are Honda, Hyundai, Kia and Mercedes-Benz. The brands that did well in retaining Generation Y and X buyers are Ford, Kia, Lexus and Mercedes-Benz, J.D. Power said.
You can reach Ellen Mitchell at email@example.com.