|The 10 brands with the highest loyalty in the first quarter of 2014|
|Time Period: Q1 2014|
|Registration Type: Retail|
|Source: I H S Automotive, with Polk new vehicle registration data|
The Ford brand had the auto industry’s highest loyalty rate among new-vehicle buyers in the first quarter, followed by Mercedes-Benz and Toyota, a new study of sales data found.
IHS Automotive said of the customers who purchased a new Ford car or light truck in the past 10 years and returned to a showroom in the first quarter of 2014, 64 percent either traded for another Ford brand vehicle or added a Ford brand vehicle to their existing household.
Mercedes-Benz and Toyota trailed Ford with a loyalty rate of 57.8 percent each in the first quarter. They were followed by Nissan, Chevrolet, Subaru, Honda, BMW, Lexus and Hyundai.
Overall, brand loyalty slipped slightly to 51 percent in the first quarter, IHS said.
The market research firm studied 1.8 million new-vehicle transactions in which a household returned to the market and purchased a new car or light truck in the first quarter.
Lincoln, Jeep, Mitsubishi, Fiat and Smart posted the biggest gains in loyalty during the period, IHS said.
Brands that improved customer loyalty rates mostly reaped U.S. market share gains, too.
Jeep, Nissan and Subaru posted the biggest gains in loyalty and market share during the period, IHS said.
Brands with the largest conquests relative to defections were Mitsubishi, Jaguar, Lincoln, Jeep and Lexus, IHS said.
Overall, Jeep’s loyalty rate jumped 8 percentage points.
Chrysler Group spokesman Todd Goyer attributed Jeep’s success to retaining owners of the Liberty, which went out of production in August 2012, and improved fuel economy across the brand. The Liberty was replaced by the Cherokee, though the new Cherokee did not go on sale until October 2013.
Tom Libby, IHS’s loyalty solutions consultant, said the study examined units sold to individual customers -- excluding fleet sales -- and covered 35 automotive brands in the United States.
Building brand loyalty is a low-cost way to carve out a spot in the retail market.
“It’s more expensive to conquest a competitive brand,” Libby said. “There is a positive relationship correlation between loyalty and retail market share … if you’re able to improve loyalty results, there’s a likelihood you’ll improve market share.”
Though conquesting is an expensive strategy for brands to implement, the IHS study found that for some brands, a high customer capture rate from competitors relative to customer defections was also a major driver of retail market share during the period.
Libby said new or redesigned models such as the Mitsubishi Outlander and Lexus GX helped draw customers to those brands during the latest period. Mitsubishi improved U.S. market share for the quarter by 40 percent and Lexus by 16 percent, IHS said.
Brian Bolain, corporate marketing communications manager for Lexus, said that while the brand has always focused on loyalty, the past 18 months have seen a renewed effort at capturing new customers coinciding with the rollout of new styling across the Lexus car and light-truck lineup.
“Lately, with the market rebounding, there has been a good opportunity for conquest,” Bolain said.
He added that Lexus tailors marketing to its conquest and retention efforts. Digital advertising strategies may be employed to intercept new customers in the search process, while one-on-one marketing, such as a newsletter distributed to Lexus owners, helps keep customers with the brand.