Lease customers most faithful to brand
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Ford was the No. 1 individual brand in customer loyalty in the second quarter, maintaining its lead for the year. |
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When it comes to auto brand loyalty, lease appears to be more.
According to a study released this month by Experian Automotive, for select mainstream brands, loyalty for returning lease customers in the second quarter was nearly double what it was for customers who had purchased their previous vehicle.
Lease penetration continues to recover from where it was during the worst of the recession in 2008-09, the research firm said. Leases accounted for 24.4 percent of new-vehicle financing in the second quarter, up from 18 percent in the second quarter of 2009. A year ago, lease penetration was 23.6 percent, Experian said.
The loyalty numbers measure the percentage of a brand's lease and purchase customers who, when they return to the market during a given period, choose the same brand. The numbers are based on household auto registration data, Experian said.
The gradual increase in leasing brings higher brand loyalty with it. In the second quarter, for instance, customers who had leased a Ford-brand vehicle chose a new Ford 67 percent of the time vs. 45 percent for customers who had purchased their previous Ford, Experian said.
Ford Credit has reported that its outstanding U.S. lease contract volume was up 19 percent in the first half of 2012 compared with the same period a year ago.
Ford was the No. 1 individual brand in customer loyalty in the second quarter, maintaining its lead for the year. The Kia brand had edged Ford out of the No. 1 spot in the second quarter of 2011, but Ford brand regained the top spot three months later and has held it.
For Nissan, loyalty was 57 percent for lease customers in the second quarter compared with 31 percent for purchasers. The Honda brand showed 55 percent loyalty among lease customers and 38 percent among purchasers while the Toyota brand had 50 percent loyalty among lessees and 43 percent among buyers. For the Volkswagen brand, Experian said, loyalty was 41 percent for lease customers vs. only 24 percent for purchasers. Rounding out the six select brands was Hyundai, with 41 percent loyalty among lease customers and 36 percent among purchasers.
When customers defect, brands have to work that much harder to increase sales, said Jeffrey Anderson, director of consulting and analytics for Experian Automotive.
Higher loyalty translates straight into sales, Anderson said. He estimated that higher loyalty for Toyota Motor Sales U.S.A. in the second quarter versus the same quarter a year ago represented additional sales of about 33,500 units for the Toyota, Lexus and Scion brands combined.
That may not sound like much, but that's approximately $1 billion in revenues at retail, Anderson said. He added: "The numbers in this industry get pretty big, pretty fast."
You can reach Jim Henry at autonews@crain.com.
