Customer loyalty climbs to record level with small uptick in 2018

Brand loyalty is stronger than ever among vehicle buyers.

Sounds like good news.

But that result comes with a cautionary note from IHS Market research firm in a press release announcing its 2019 loyalty award winners.

With about 17.6 million new vehicle registrations during the 2018 model year, 53.7 percent of customers – or about 9.5 million – returned to market to purchase or lease another vehicle from the same make they already owned, according to the research firm.

The GMC Yukon Denali helped General Motors to the mountaintop.

The GMC Yukon Denali helped General Motors to the mountaintop.

“While this represents a record loyalty rate, the increase was just one-tenth of a percentage point from last year, demonstrating a flattening of loyalty rates in the industry after years of increases … [and] competition is stronger than ever at the top,” the research firm reported.

So where is the top of the loyalty mountain?

Among the overall winners were General Motors, top manufacturer; Ford, top make; Jeep, highest conquest percentage; Lincoln, dealer loyalty, and Tesla, most-improved loyalty to make and most-improved conquest percent, with GM, Ford and Jeep all repeating 2017 model-year wins.

GM and Jeep also scored four-peats, while Ford’s streak reached nine years, with about two-thirds of GM and Ford owners having remained loyal to their brands when buying or leasing in 2018.

Also notable in brand results is Toyota’s strength in ethnic markets, leading that category overall, as well as Hispanic, Asian and African American markets individually.

When it comes to customer loyalty, IHS recognized 24 models – mainstream and luxury – with its 2019 awards, which are based on 2018 model-year sales. From the “traditional” subcompact Mini Countryman to the full-size luxury Lincoln Navigator sport utility vehicle, these 2018 models demonstrated “superior customer retention and conquest.”

Mainstream brands with most segment wins are Toyota with three and Ford, Honda and Jeep, two each, while luxury brands Lexus earned four segment wins and Lincoln three, according to the research firm.

This year’s segment winners by category are:

Mainstream vehicles

Chevrolet Equinox, compact crossover utility vehicle (CUV)

Subaru Outback, midsize CUV

Jeep Wrangler, compact sport utility vehicle (SUV)

Jeep Grand Cherokee, midsize SUV

GMC Yukon Denali XL, full-size SUV

Toyota Tacoma, midsize pickup

Ram 1500, full-size half-ton pickup

Ford F-Series, full-size three-quarter to one-ton pickup

Honda Odyssey, midsize van

Mini Countryman, traditional subcompact car

Honda Civic, traditional compact car

Toyota Camry, traditional midsize car

Toyota Avalon, traditional full-size car

Volkswagen GTI, sports car

Ford Mustang, midsize sports car

Luxury vehicles

Lincoln MKC, compact CUV

Lexus RX, midsize CUV

Lexus GX, midsize SUV

Lincoln Navigator, full-size SUV

BMW i3, traditional subcompact car

Lincoln MKZ, traditional compact car

Lexus ES, traditional midsize car

Lexus LS, traditional full-size car

Porsche 911, sports car

Of course, the market research firm had its take on what’s important going forward for an industry facing several potential challenges in 2019, including lower demand.

“As the market plateaus, insight from advanced analytics will enable OEMs and their dealers to engage with consumers more efficiently and effectively through a better understanding of consumer buying behavior,” said Kristen Balasia, a vice president at IHS Markit.

The loyalty awards program is meant to “showcase the achievements of the automakers, brands and their dealer networks to win back and conquest customers during such a competitive sales environment,” said Steve Had, IHS’ vice president of automotive product solutions. “[And] recognize these industry leaders that are working to improve their loyalty efforts year over year.”

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