• Dec 9th 2010 at 5:33PM
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Customer loyalty is incredibly important to automakers and something earned by providing both good products and service. J.D. Power has just put out its 2010 Customer Retention Study to show how well each automaker is doing at keeping existing car buyers coming back for more. Leading the way are Ford and Honda who tie each other with a 62 percent rate of customer retention. Hyundai, Lexus and Toyota are right on their heels however with a rate of 60 percent each.

Overall, import manufacturers have the edge on the domestics but that gap has slimmed down due to customers realizing that American automakers are producing a greater number of good products. Of the top 10 automakers in the study, nine are imports.

One of those imports is Kia, which has climbed the most compared to the 2009 study. Rising 21 percentage points, the Korean automaker now sees a rate of retention of 58 percent. That's 10 points above the industry average.

Be sure to click past the jump to take a look at the full press release for more information on this study.

[Source: J.D. Power]
Show full PR text
J.D. Power and Associates Reports:
Desire for a Fun Driving Experience Increases in Importance as a Reason for Brand Loyalty, While Expected Resale Value Becomes Less Important

Ford and Honda Each Rank Highest in Owner Retention, in a Tie

WESTLAKE VILLAGE, Calif.: 9 December 2010 - New-vehicle owners are increasingly citing fun-to-drive vehicles as a top reason to remain loyal to their brand, while shifting away from expected resale value as a loyalty reason, according to the J.D. Power and Associates 2010 Customer Retention StudySM released today.

Now in its eighth year, the study measures the rate at which automotive brands retain their existing customers and the reasons why owners remain loyal. Customer retention is critical to a brand's market success, particularly during the current period of slow recovery, in which each new-vehicle sale is vital.

The study finds that the importance of fun-to-drive vehicles as a reason for owner loyalty has increased by eight percentage points in 2010, compared with 2009. Meanwhile, the importance of resale value as a reason to stay loyal has decreased by 10 percentage points from 2009.

In addition to customer retention, the study also examines rates at which automotive brands capture customers from their competitors, known as conquesting. The importance of a fun-to-drive vehicle has also increased as a reason why brands conquest new customers from their competitors, as has vehicle styling.

"Now that economic and market conditions have improved somewhat, vehicle owners are increasingly citing emotional, rather than practical, reasons for staying with their vehicle brand or switching to a different one," said Raffi Festekjian, director of automotive product research at J.D. Power and Associates. "In light of this, developing new models with attractive styling and that are perceived as fun to drive is increasingly critical for automakers in order to retain and conquest customers as the market continues to recover."

Ford and Honda rank highest in a tie among automotive brands in retaining vehicle owners. Each brand retains 62 percent of owners. Ford's retention rate is primarily driven by the Edge, F-Series and Fusion models, while for Honda, retention is driven by the Accord, CR-V and Pilot. Comparing the two brands, Ford owners are more likely than are Honda owners to indicate they have remained with their brand due to the perception that their new vehicle is fun to drive or has good styling. Honda owners are more likely than Ford owners to cite resale value and safety as reasons for repurchasing the brand.

Following Ford and Honda in the rankings are Hyundai, Lexus and Toyota, in a three-way tie, each with a customer retention rate of 60 percent. Kia posts the greatest improvement in customer retention rate from 2009, improving by 21 percentage points to 58 percent in 2010.

Overall customer retention has remained stable from 2009 at 48 percent. In 2010, 16 of the 34 ranked brands have improved their customer retention rates from 2009, while 14 have declined and four have remained flat.

The study finds that customer retention among domestic brands, as a whole, has improved slightly from 2009. In 2010, 69 percent of owners who traded in a vehicle from a domestic brand purchased another domestic vehicle, compared with 68 percent in 2009. However, retention rates among domestic brands continue to lag behind those of import brands. In 2010, 90 percent of owners who traded in a vehicle from an import brand purchased another import vehicle-a level that has remained consistently high during recent years.

Compared with their retention rates, domestic brands have made more substantial progress during the past two years in conquesting customers from import brands. In 2010, 14 percent of buyers of domestic brand vehicles previously owned an import, up from 10 percent in 2008.

"While import brands still have notably higher customer conquest rates than domestic brands, the gap is beginning to narrow," said Festekjian. "In recent years, domestic brands have achieved parity or even surpassed the performance of import brands in initial quality and new-vehicle appeal, and customer perceptions of these nameplates seem to be evolving accordingly. It will be interesting to see how the performance gains by domestic brands affect retention and conquest rates in the coming years."

The 2010 Customer Retention Study is based on responses from 123,601 new-vehicle buyers and lessees, of which 81,350 replaced a vehicle that was previously acquired new. The study was fielded between February and May and August and October 2010.

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    • 1 Second Ago
      • 4 Years Ago
      and on the far right of the low end of the graph........................................Saab.
      • 4 Years Ago
      Go figure.
      I've never seen people defend a car company so fiercely on here.. even while are they releasing some pretty mediocre/underperforming stuff these days.
      ( although they still seem to be tops for reliability. )

      I suppose the 80's and 90's glory days of Honda are still fresh in the minds of many.

      But Hyundai is gunning for the top.... i think in the next decade, people will revere Hyundai like they did Honda back in the glory days.

      • 4 Years Ago
      Honda / Toyota built his loyalty torward Quality products. Hyundai is building his
      loyalty in cheap products with some quality. Problem is, customers that seek value
      are not so loyal. If Honda and Toyota design a subbrand with lower price, is game
      over for Hyundai-Kia, thats the reason hyundai is raising his prices slowly and set apart
      his imagen of cheap.
      • 4 Years Ago
      I like Ford. My last name has 1 syllable since I'm from China and Ford is 1 syllable. Go Ford!
        • 4 Years Ago
        My cat's breath smells like cat food.
        • 4 Years Ago
        I am not wearing pants
        • 4 Years Ago
        What does gua stand for btw? I don't know any Chinese person with that name.
        • 4 Years Ago
        I love lamp
      • 4 Years Ago
      Kia has improved its image faster than any brand in recent memory. Congrats.

      And Toyota's retention shows that consumers ultimately rely on their own experience and their inner circle of contacts, not lawyer-propped safety experts and histrionic journalists.

        • 4 Years Ago
        It also can't be ignored that during study period Toyota was juicing sales of their cars, including Lexus, with what probably a good many of their current owners considered once-in-a-lifetime incentives. It's not unreasonable to consider that these well may have pulled forward many sales among those who would only consider a Toyota, meaning Toyota's numbers were propped up by these customers who would have otherwise not been in the market during this period.

        Also, from the chart, it looks like for this part of the study they only included people trading in vehicles bought by the respondent new. So there's no way to tell really how many more (or fewer) people who had a used Toyota traded it in on something else this year vs. last.
        • 4 Years Ago
        Also not surprised by Toyota. I know plenty of people who swear by them, but they're not what I would call enthusiasts. They are aimed at the people who want reliable, basic transportation,and those people who have owned them will keep buying them, and will be as happy with them as ever. I think it's a shame that so many other cars today are just as reliable and offer much more than basic transportation for the same price, but I guess ignorance is bliss. Toyota's problem is they merely make good cars, while everyone else is making great cars. I haven't been interested in a Toyota since the Supra, and that was how many years ago?

        Dear Autoblog,
        For Christmas, all I want is an edit button.
        • 4 Years Ago
        What about Hyundai? Just a few years ago they were pretty similar to KIA in image, but I think Hyundai has brought their image up faster.
        Ford has also had quite the image turn around.
      • 4 Years Ago
      I think Ford probably deserves to be number one, but Ford trucks has to be a big part of these numbers.
        • 4 Years Ago
        Not just trucks...we've had a 2006 Fusion and a 2010 Fusion and loved them both. After a deer took out the '10, we got a certified '08 Edge and have been very impressed. I recommed Ford to everyone now.
        • 4 Years Ago
        I dunno bout that. I've never owned one personally, but I know my F150-owning coworkers are looking elsewhere for their next trucks... I'll have to ask em why.

        My only negative observation of them recently has been that the interior of the 2011 King Ranch F250's is alarmingly cheesy. That really surprised me, since I loved the interiors on the mid 2000's KR's (and I'm the kind of person who thinks leather in a truck is a waste). The materials and parts seemed like they would have been at home on a Scion, not a truck that some people shelled out $60,000 for.
      • 4 Years Ago
      With the lousy and boring design coming from Honda they are heading for trouble.
        • 4 Years Ago
        I wouldn't call Honda's design "boring".
        I think they're pretty bold, however; they are bold in the wrong, not just being beaten with the ugly stick, but the whole damn tree sort of way.
      • 4 Years Ago
      How on earth did Kia end up above BMW, Porsche and Jeep? In term of retention, I know quite a number of people who will only buy within BMW...
        • 4 Years Ago

        The implication was that I had never heard a Kia owner say that their next vehicle could ONLY be a Kia, whereas I have heard that from countless BMW owners. While this is only anecdotal evidence for my point, I doubt that Kia owners would stay if they could get a Honda or a VW at a better price. And no, I'm aware that the people I know are not perfectly representative of the American consumer but then I do know plenty of people who own a BMW, and plenty who own a Kia, or a Jeep, or any other brand of automobile.

        Also, if you somehow think that a two line post on a blog is emblematic of a person's level of intelligence, it seems far more likely that you are the one who is lacking in this area.
        • 4 Years Ago
        "I doubt that Kia owners would stay if they could get a Honda or a VW at a better price."

        Uh, the Sorento is the number one selling Kia, and the Soul is often number two. This ain't 2003 -- Kia owners aren't all poor people who settle for Rios. Their average transaction price is very close to Honda's.
        • 4 Years Ago
        And your sample of "people you know" is representative of the buying habits of the entire brand...I wonder how people function without any semblance of intelligence in this world.

        BMWs while fantastic driving vehicles are utter garbage when it comes to reliability, perhaps explaining why they have such low retention rates. The inconvenience of constant dealer maintenance outweighs the cachet of the mark to most people.
        • 4 Years Ago

        So you respond to your anecdote with further speculation on buying
        trends based on "your people"...utterly remarkable, thanks for proving
        the merit of my original statement.
        • 4 Years Ago

        I didn't say they would, I just mean they're likely staying for a specific car they like, the price and warranty, and possibly service depending on the dealer, not the brand.
      • 4 Years Ago
      Toyota and Honda seem to be doing pretty good.
      • 4 Years Ago
      wow BMW in 10th place wat about in 1995-2007....

      can u please post it....
      • 4 Years Ago
      Buick is down there because you can't sell another car to a dead person, amirite?
        • 4 Years Ago
        Buick's still beating the hell out of Chrysler, Dodge, Jaguar and SAAB...
        • 4 Years Ago
        Aprime, that's because Toyota owners know the "scandal" was manufactured and nothing more than a witch hunt. Kudos to Toyota and Lexus.

        And Kudos to Hyundai and Ford as well (and Honda but they have done well for years).
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