When we talk about car sales, we typically look at units sold and profit made, but automakers and analysts look at deep metrics. S&P Global recently an overview of customer retention metrics in the industry, and it showed that many brands are having trouble holding onto customers beyond a single vehicle purchase.
J.D. Power’s Automotive Brand Loyalty Study dropped this week, with Subaru and Lexus predictably topping the charts. Subaru actually edged out Toyota by a hair in the mainstream segment by retaining 60.5 percent of its owners, and is assumed to be aided by younger generations just getting into vehicle ownership. This is something we can back up anecdotally, as many drivers look back fondly at the nameplate and are eager for a second helping.
If your author had a nickel for every person that happily reminisced about the hand-me-down Subaru Legacy or Forester wagons they drove during their formative years, he would have a jar full of coins wasting space on a shelf somewhere because nickels aren’t particularly valuable.
I can’t quite remember what it was that jogged my brain the other night, but whatever it was, it conjured up a wholesome yet frustrating memory. A memory of a person and a car from my childhood.
The person was my oldest friend’s mother — one of the kindest women I’ve ever known, matched easily by the daughter she clearly raised right. The apple didn’t fall far from the tree. As for the car, it was a blue, mid-’80s Toyota Tercel 5-door. For me, that car is just a memory, and a somewhat annoying one at that, but for the owner — my friend’s mother — it was the first of many.
Toyota. They’re like the mob; easy to get in, awfully hard to leave. And that’s the way it was with my friend’s mother, who never again owned a car from any other brand.
My father has historically been a Ford man. Despite numerous forays into Chevrolet, Chrysler, Volkswagen and Toyota, he has always returned to the Blue Oval when the time came to purchase a keeper. Other nameplates came and went, receiving slightly less attention, but there was always at least one well-maintained Ford in the garage. As a result, I became familiar with dealerships using the suffix “Ford Lincoln Mercury” at a very young age.
For me, it was an opportunity to ogle the fancier sedans my father claimed didn’t make financial sense. “It’s the same car,” he would always say. “This one just costs more.”
When you’re eight and have nothing to distract yourself with other than the swizzle sticks you stole from the coffee area, fatherly advice has a way of sinking in. I’ve often wondered why automakers would even dare place their premium offerings so close to their less-expensive models. But times have changed.
J.D. Power’s annual Automotive Brand Loyalty Study came out for 2019 this week. According to the outlet, Subaru outranks every other brand when it comes to consumer loyalty. That meshes with any anecdotal evidence I’ve accumulated by just speaking with people. Despite some nagging quality concerns stemming from the company’s swift sales growth, most people I know that have driven a Subaru still want one.
Subaru also has been running some of the best advertisements within the industry with the broadest possible appeal ( as they often feature dogs) over the last few years. Almost every woman I’ve spoken with feels positively about the brand and, while I can’t say the same about the men, it’s not a nameplate that receives much ire with laypersons — minus the odd tale of a tragic timing chain mishap (I told you to take it in, Sean).
For the most part, the major benefit of brand loyalty is not getting into an argument with your family members at the dinner table. Grandpa worked for General Motors, Dad buys Chevy exclusively, and you decided not to buck the trend. You even bragged about Aunt Beth helping you get a sweet deal on that new Malibu, while everyone nodded in approval between bites of turkey.
However, there are more tangible rewards for sticking with a singular auto brand. Now that the Western market has surpassed peak growth, manufacturers know that it’s going to be a lot harder to reel in new customers. They’ve decided to shift tactics by offering incentives to existing customers in the hopes that they won’t leave them the next time they need a fresh vehicle.
After Ford’s decision to cull all passenger cars except the Mustang, Blue Oval brass felt confident that existing and upcoming Ford trucks, SUVs, and crossovers (or crossover-like vehicles) would be more than enough to keep current car owners in the family.
That’s probably wishful thinking. A new survey of Ford sedan owners shows that the allure of other brands — those that still sell sedans — is enough to lure plenty of them away from the Ford flock.
If German automakers keep calling SUVs and five-door liftbacks “coupes,” maybe we’ll see a reversal of this trend. For now, however, American car buyers have never been quite so unimpressed with “cars” come trade-in time.
According to Edmunds’ annual Trade-In Loyalty Report, passenger cars just don’t have what it takes to lure buyers back into the three-box lifestyle. Sport utility vehicles, on the other hand, have all the appeal of a WWII pinup model parachuting into an overseas USAF base.
Brand loyalty is a central element in the consumer culture that we’re all slaves to. There is a specific Korean company that makes most of the electronics I own, an American distiller that I trust with my alcohol, and I have never purchased any toilet paper other than the one that has the dog for a mascot. When I buy another motorcycle, I already know what it’s going to be — and I can say the same thing about jeans, waffles, or boots.
As automotive enthusiasts, most of us are informed enough to have our preferences without succumbing to a blind faith in any singular model or brand. That said, the rest of the population isn’t made up of car devotees. Some people will happily return to a familiar dealership, buy a familiar truck, drive their new purchase home, and immediately apply a decal of Calvin urinating on the emblem of a rival brand.
Fortunately, it’s not always about automotive zealotry. Often, people return to a particular model or manufacturer because it treated them right. As it turns out, they’ve been awarding trophies based on this phenomenon for two decades. Last night, business and marketing research provider IHS Markit presented the 21st annual Automotive Loyalty Awards in Detroit.
So, where do the strongest automotive loyalties lie?
Decades of feel-good corporate outreach and a hug-worthy relationships with buyers didn’t stop potential customers and veedub diehards from fleeing Volkswagen after the diesel stink bomb went off in Wolfsburg.
Like a husband of 50 years caught cheating with his wife’s sister, the intentional deception behind the diesel emissions scandal shattered the hard-earned trust between the company and its consumers. Thanks to that, Volkswagen’s sales trajectory now mimics that of a very leaky submarine.
Could Volkswagen have managed the scandal better, and can the company rebuild that lost trust?
According to the consumer opinion-tracking Reputation Institute, the answers to those questions are “you bet” and “yeah … it’s gonna take a loooong time.”
Quick question: what was the number one factor in your most recent new vehicle purchase? Was it styling? Performance? Features? Financing? Price? Comfort? Practicality? Or that old stalwart, quality? If you answered in the affirmative to that last suggestion, you’re part of a shrinking bloc. There were a lot of winners in the 2014 auto sales race, but quality wasn’t one of them.
The Great Recession has given us so much since it began five years ago with the fall of Lehman Brothers and Washington Mutual, from underwater mortgages and high unemployment, to bailouts of the financial and automotive manufacturing sectors and credit freezes.
Regarding the last item, a byproduct from said freeze will flood automakers with the potential to retain and steal customers when more and more leases draw to completion in the next year.
TTAC Commentator Jimal writes:
Sajeev and Steve,
I have one of those quandaries that most adults will go through sooner or later in life and I figured I would tap into you and the B&B for suggestions. My father passed away recently after a long illness and I’m helping my mother with settling his estate; cleaning up finances, etc. Among the things my father left behind were his 2005 Buick LeSabre, which my mother hates, and her cherished 1996 4-door Chevy Blazer.
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