The plateauing of U.S. new-vehicle sales has received extensive media coverage, but another important, though less publicized, plateauing is also occurring. Brand loyalty rose almost 9 percentage points from 2003 through 2017 to 53.7 percent, but recent data suggest this metric is leveling off.
Through the first nine months of 2018 brand loyalty is 53.6 percent, the same as a year ago. Year-over-year change in brand loyalty in every month this year has been less than the corresponding result a year ago. Lastly, in each of the four most recent months for which data are available, June through September, brand loyalty is down vs. the same month in 2017.
Before this year, brands could count on increases in deliveries to returning loyal customers to help meet annual sales goals, but that is no longer the case. In today's market, brands will have no choice but to conquest owners from the competition to achieve year-over-year gains.
This competitive landscape reflects 40 major brands targeting one another. In such an environment, the No. 1 priority among automakers, dealers and their marketing partners must be maintaining brand loyalty.