Japanese, German brands dominate J.D. Power loyalty report

Brand loyalty is increasing among new-vehicle buyers, fueled by the current vehicle shortage, J.D. Power said in a study released Tuesday.

For the first time, the analytics firm broke its loyalty study into five segment categories – including premium car, premium SUV, mass market car, mass market SUV and truck.

A company's loyalty score is the percentage of new-car buyers who return to the same brand when trading their old vehicle, and was measured from transaction data from September 2021 through August 2022.

Foreign brands keep crown

Among the segment leaders, foreign brands had the highest brand loyalty.

Notable among them was Toyota, which ranked first in both the mass market car brands and mass market SUV brands segment with 62.2 percent and 63.6 percent return rate, respectively.

In the mass market SUV segment, fellow Japanese brand Subaru came in a close second with 62.6 percent. South Korean brand Kia was a less competitive second-place finisher in the mass market car segment, with a rate of 54.1 percent.

While Japan owned the mass market, Germany topped the premium market.

Porsche took the top spot among premium car brands with a 57.4 percent loyalty rate. BMW, another German brand, had the highest return rate of premium SUV brands, clocking in at 58.6 percent.

The sole domestic automaker to take a segment was Ford, which posted the highest loyalty rate among truck brands with 63.8 percent – the highest in the study.

Upticks across the board

Because the study was redesigned in 2022, comparing this year's loyalty rates to those of the last study is not an apples-to-apples situation.

However, there are clear upticks in loyalty rates among the top brands.

Toyota saw a 1.1 percentage point jump from its mass market rating a year ago in its mass market car segment. The SUV segment jumped even more, by 2.5 percentage points, from 2021's mass market average.

Subaru, beat out by Toyota despite holding the mass market crown last year, is also rising. In the SUV segment, the brand's rate rose by 0.8 percentage points.

Premium brands arguably saw the biggest climb on average. Porsche saw a 7.2 percentage point uptick, and BMW saw an even 13 percentage point increase.

The largest jump from a brand's 2021 mass market average came from America's sole loyalty champion. Ford jumped 9.9 percentage points from its previous rating.

Supply chain woes surprisingly helpful

J.D. Power's statement said many of the upticks can be attributed to the new-vehicle shortage.

"The issue of tight supply chain and lower-than-normal production could have been quite disruptive to loyalty, but the highest-ranking brands excelled by staying focused on keeping owners in the brand," Tyson Jominy, vice president of data & analytics at J.D. Power, said in the statement.

Jominy said the shortage is just one of many disruptions on the horizon. He cites the rise of electric vehicles as suspect for changing the loyalty rating status quo.

"There is an element of risk to brand loyalty that could erode for those sitting on the sidelines or not moving quickly enough," Jominy said.