Automotive brands with the most and least loyal owners
03-23-18, 03:36 AM
#16
i agree there is a big distinction between loyal repeat buying customers and serial lessors, and would like to see the charts further broken down by these two distinctive forms of "purchase". oh btw, i am planning to "purchase" a 2-bedroom apartment on a month to month basis and then "purchase" storage space from a commercial self-storage warehouse
03-23-18, 05:25 AM
#17
Lexus Fanatic
i agree there is a big distinction between loyal repeat buying customers and serial lessors, and would like to see the charts further broken down by these two distinctive forms of "purchase". oh btw, i am planning to "purchase" a 2-bedroom apartment on a month to month basis and then "purchase" storage space from a commercial self-storage warehouse
I don't see why buying a car wouldn't be like spinning a roulette wheel. Every time that wheel goes round, you're bound to cover just a little more ground. Meaning, every time it spins, it doesn't remember where it landed last. Funny casinos have a board showing a wheel's history, as if it has any effect on the coming spin. So when a person is buying a car, why wouldn't they buy the best car that they can afford, at time of purchase? What does the last purchase have to do with anything? BMW would be a good example. If you are in the market today, and have a 2007, the product imho is no where near as good as it was 10 yrs ago. At the same time, a 2018 Kia may be tons better than it was in 2007.
03-23-18, 06:20 AM
#18
Lexus Fanatic
I don't see why buying a car wouldn't be like spinning a roulette wheel. . So when a person is buying a car, why wouldn't they buy the best car that they can afford, at time of purchase? What does the last purchase have to do with anything? BMW would be a good example. If you are in the market today, and have a 2007, the product imho is no where near as good as it was 10 yrs ago. At the same time, a 2018 Kia may be tons better than it was in 2007.
Last edited by Toys4RJill; 03-23-18 at 06:40 AM.
03-23-18, 06:39 AM
#19
Lexus Fanatic
The past reputations and perceptions are difficult to change. I don’t think General Motors especially (and most American brands) will ever overcome their inferior perception vs Japanese vehicles. When the Japanese entered the US market in the 70s and 80s, the eroded US market share owned by the big three. It goes go all brands, it hard to change consumers perception of a brand.
03-23-18, 06:44 AM
#20
Lexus Fanatic
Hopefully you don’t turn this into a Hyundai vs Toyota debate. Perhaps your thoughts on Mercedes dropping?
03-23-18, 06:55 AM
#21
Many Honda/Toyota repeat owners have a history with reliable vehicles they can count on.
Many truck owners are loyal as well. You rarely see a Chevy or Ford owner switch brands.
Lexus owners, as shown on this site, are loyal as well. The client from whom I purchased my LS460, and her husband (until his death) have been buying LS models since 1992. I had previously purchased the husband's 92 LS400, and bought the 07 LS460 when she bought a new 17 LS460.
It was interesting to see the drop in Volvo, which corresponds to our usage. My wife had an old GL, a 92 850 (one of the best cars we have ever owned), a 2000 S80, and an 06 S80, all with no issues. However, when time came to buy another we shopped and bought her the ES300h.
Re the lease/purchase question, from a manufacturers standpoint all vehicles are purchased....either by the consumer or the lease/finance company (Lexus Financial, Honda Financial, etc.).
Many truck owners are loyal as well. You rarely see a Chevy or Ford owner switch brands.
Lexus owners, as shown on this site, are loyal as well. The client from whom I purchased my LS460, and her husband (until his death) have been buying LS models since 1992. I had previously purchased the husband's 92 LS400, and bought the 07 LS460 when she bought a new 17 LS460.
It was interesting to see the drop in Volvo, which corresponds to our usage. My wife had an old GL, a 92 850 (one of the best cars we have ever owned), a 2000 S80, and an 06 S80, all with no issues. However, when time came to buy another we shopped and bought her the ES300h.
Re the lease/purchase question, from a manufacturers standpoint all vehicles are purchased....either by the consumer or the lease/finance company (Lexus Financial, Honda Financial, etc.).
03-23-18, 06:58 AM
#22
Lexus Fanatic
Originally Posted by LexsCTJill;10150908[left
Hopefully you don’t turn this into a Hyundai vs Toyota debate. Perhaps your thoughts on Mercedes dropping?
On the Mercedes issue, I've covered that in other threads, but will quickly (in a nutshell) repeat it here. Their problems go back well before 2007. When Lexus debuted in the early 1990s, M-B was caught with its pants down. Before that, M-B built what were arguably the most durable cars in the world. The LS400 significantly undercut the price of many larger M-B products sold at that time, and M-B, stuck with high labor and material costs in Germany, and few if any other ways to cut their costs, significantly lessened the amount of material solidness in their vehicles....all except for the tank-like G-Wagen.
03-23-18, 03:57 PM
#23
Lexus Fanatic
On the Mercedes issue, I've covered that in other threads, but will quickly (in a nutshell) repeat it here. Their problems go back well before 2007. When Lexus debuted in the early 1990s, M-B was caught with its pants down. Before that, M-B built what were arguably the most durable cars in the world. The LS400 significantly undercut the price of many larger M-B products sold at that time, and M-B, stuck with high labor and material costs in Germany, and few if any other ways to cut their costs, significantly lessened the amount of material solidness in their vehicles....all except for the tank-like G-Wagen.
03-23-18, 04:11 PM
#24
Lexus Fanatic
Well, we know that Lexus, especially with the first LS400, took some of M-B's customers....that's a given, though it's difficult to come up with exact figures. Ditto when the RX300 came out in the late 90s, and took a number of what would have been the Mercedes ML base. Since 2007, Mercedes has not been itself been "failing" so much as simply having to deal with a world of more competitors (especially Audi)....and, of course, in the last couple of years, Genesis has also been added, though to compensate, Acura and Infiniti are not the force they once were.
03-23-18, 05:13 PM
#25
Lexus Fanatic
I would agree to that. I would like to here a compelling reason why leave a reliable brand for a brand that is mid pack? In terms of reliability you can't go wrong with a Toyota or Honda. But there are some nice cars out there, husband loved the new Cruze hatch at the auto show. But not sure about reliability.
03-23-18, 06:16 PM
#26
Lexus Champion
Well, we know that Lexus, especially with the first LS400, took some of M-B's customers....that's a given, though it's difficult to come up with exact figures. Ditto when the RX300 came out in the late 90s, and took a number of what would have been the Mercedes ML base. Since 2007, Mercedes has not been itself been "failing" so much as simply having to deal with a world of more competitors (especially Audi)....and, of course, in the last couple of years, Genesis has also been added, though to compensate, Acura and Infiniti are not the force they once were.
The W140 for example is cited as a true big luxe tank, yet it's handling was pretty decent for what it was. It was the start of electronic aids and various subsystems. Then came the W220, and it rode on air and handled like a much smaller car and introduced new tech as well. Problem was, it was all too leading edge and the owners became the long term beta testers.
MB especially needed to hang on to its prestige reputation so essentially they added more and more tech stuff and of course, ride/handling stuff at the expense of reliability. Certainly Lexus/Toyota earned their reliability/quality/durability reputation and that's what keeps the core customers always coming back in the face of even more competition. The Germans, so far are still interested in leading edge tech and styling - so they're not so worried about reliability as much.
03-23-18, 07:39 PM
#27
Lexus Champion
Here are some key points from the Edmunds study. It looked at ownership only, not leases and lease returns.
As expected, buyers are most loyal with SUVs – 75% of SUV owners trade in for another SUV while only 57% of car owners traded in for another car.
Truck (pickup truck) loyalty is also high but is leveling off due to the lack of choice available. SUVs straddle the gap – and so are able to attract – car and truck buyers.
The market share held by cars has dropped from half the market in 2012 to just over one-third of the market in 2017.
“No more boring cars!”. To counter the trend to SUVs, automakers are making cars that appeal more to buyer emotions than in the past.
The Japanese brands (specifically Toyota and Honda) are doing well because they had a head start and their buyers continue to remain loyal. Edmunds believes that the Camry and Accord should continue to sell well.
Toyota and Honda do well in this study because of their well-earned reputations for quality and reliability, and will continue to do so, the study says, because they have the model lineups that buyers want.
Toyota and Honda have been successful not only because of high-quality and reliable cars, but because they seem to know what buyers want in their vehicles. Have the right product and buyers will walk in the door.
Edmunds says that FCA is doing so poorly because they have gotten rid of their cars in order to concentrate on the more profitable SUVs and trucks. Chrysler and Dodge car buyers looking to trade in their cars find no new Chrysler or Dodge cars to replace them with so they are forced out of the showroom.
I believe that this does not bode well for FCA when the SUV trend shifts -- as it inevitably will. There will be no cars in the showrooms to attract the (few) buyers who remained loyal to FCA during the SUV craze.
Report Methodology
All the numbers in this report are the percentages of vehicles traded in to purchase the same segment, manufacturer, brand or vehicle. Edmunds analysts believe that looking at the data from the angle of trade-ins rather than vehicles purchased is the truest form of buyer loyalty because it excludes conquesting, which can also be seen as an equally or more desired outcome. This study includes data from 2007 to 2017 and our analysis of more than 13.9 million transactions in the U.S. Lease returns were excluded from this study.
All the numbers in this report are the percentages of vehicles traded in to purchase the same segment, manufacturer, brand or vehicle. Edmunds analysts believe that looking at the data from the angle of trade-ins rather than vehicles purchased is the truest form of buyer loyalty because it excludes conquesting, which can also be seen as an equally or more desired outcome. This study includes data from 2007 to 2017 and our analysis of more than 13.9 million transactions in the U.S. Lease returns were excluded from this study.
Truck (pickup truck) loyalty is also high but is leveling off due to the lack of choice available. SUVs straddle the gap – and so are able to attract – car and truck buyers.
SUVs Now Have Highest Segment Loyalty Rate
While historically truck buyers have been the most fiercely loyal to their segment, the growing number of SUVs on the market as given this segment the loyalty crown. In 2017, 75 percent of SUV owners who traded in their SUV to buy another new vehicle chose an SUV, compared to 57 percent of car owners who chose a car again for their next purchase and 74 percent of truck owners who traded in their truck for a new one. In fact, due to the breadth of SUV offerings of all sizes, the segment has developed into a funnel for buyers of all types — stealing business away from both cars and pickup trucks.
While segment loyalty for trucks remains high, it has leveled off in recent years, partly because there simply aren’t as many model choices available for truck buyers as for SUV buyers.
While historically truck buyers have been the most fiercely loyal to their segment, the growing number of SUVs on the market as given this segment the loyalty crown. In 2017, 75 percent of SUV owners who traded in their SUV to buy another new vehicle chose an SUV, compared to 57 percent of car owners who chose a car again for their next purchase and 74 percent of truck owners who traded in their truck for a new one. In fact, due to the breadth of SUV offerings of all sizes, the segment has developed into a funnel for buyers of all types — stealing business away from both cars and pickup trucks.
While segment loyalty for trucks remains high, it has leveled off in recent years, partly because there simply aren’t as many model choices available for truck buyers as for SUV buyers.
Passenger Cars in Crisis ...
In 2017, passenger cars accounted for 36 percent of all new vehicles sold. This is the lowest market share figure ever for cars and a noticeable decline from just five years ago when cars constituted half of the sales in new car market. The primary cause for this drop: In the last three years, millions of passenger car owners have traded their cars in for a truck or an SUV. In 2017, only one-third of all vehicles traded in went toward the purchase of a car; five years ago, the number was close to half. Slowing sales and lower margins have caused a few major automakers to either re-evaluate the passenger car segment or abandon it completely.
In 2017, passenger cars accounted for 36 percent of all new vehicles sold. This is the lowest market share figure ever for cars and a noticeable decline from just five years ago when cars constituted half of the sales in new car market. The primary cause for this drop: In the last three years, millions of passenger car owners have traded their cars in for a truck or an SUV. In 2017, only one-third of all vehicles traded in went toward the purchase of a car; five years ago, the number was close to half. Slowing sales and lower margins have caused a few major automakers to either re-evaluate the passenger car segment or abandon it completely.
The Japanese brands (specifically Toyota and Honda) are doing well because they had a head start and their buyers continue to remain loyal. Edmunds believes that the Camry and Accord should continue to sell well.
... But Not All of Them
While this signals a clear crisis for the passenger car segment, it doesn’t mean cars will completely disappear. This shift has forced automakers to change their go-to-market strategy for passenger cars, designing products to appeal to buyer emotions rather than positioning cars as the pragmatic, cost-effective choice.
The Japanese automakers have found the most success so far with handling this pivot, but they are starting from a place of dominance — 50 percent of all car trade-ins in 2017 were from a Japanese brand. Companies such as Toyota and Honda built their business around producing the most reliable, cost-effective passenger cars, and they have kept buyers coming back by adding emotion into the equation. In 2017, 83 percent of people who traded in Japanese cars to purchase a new car bought a Japanese brand, compared to 53 percent for American brands. The high retention rate for Japanese brands bodes well for the recently redesigned Toyota Camry and Honda Accord, both long seen as the passenger car gold standard, and helps Toyota and Honda keep more buyers in their brands even as SUV loyalty becomes imperative.
While this signals a clear crisis for the passenger car segment, it doesn’t mean cars will completely disappear. This shift has forced automakers to change their go-to-market strategy for passenger cars, designing products to appeal to buyer emotions rather than positioning cars as the pragmatic, cost-effective choice.
The Japanese automakers have found the most success so far with handling this pivot, but they are starting from a place of dominance — 50 percent of all car trade-ins in 2017 were from a Japanese brand. Companies such as Toyota and Honda built their business around producing the most reliable, cost-effective passenger cars, and they have kept buyers coming back by adding emotion into the equation. In 2017, 83 percent of people who traded in Japanese cars to purchase a new car bought a Japanese brand, compared to 53 percent for American brands. The high retention rate for Japanese brands bodes well for the recently redesigned Toyota Camry and Honda Accord, both long seen as the passenger car gold standard, and helps Toyota and Honda keep more buyers in their brands even as SUV loyalty becomes imperative.
Toyota and Honda have been successful not only because of high-quality and reliable cars, but because they seem to know what buyers want in their vehicles. Have the right product and buyers will walk in the door.
Top of the Pack
Both Toyota and Honda have built reputations for quality and reliability that resonate with purchasers who are looking to keep their vehicle for an extended period of time. Their full model lines do a good job of keeping customers in the family. But not only that, the two automakers also report the highest model-to-model loyalty rates in many segments. Camry and Accord stand at the very top of the midsize segment while their SUVs are also near the top of their respective segments. In fact, 44 percent of both RAV4 and CR-V trade-ins are applied toward new ones.
Both Toyota and Honda have built reputations for quality and reliability that resonate with purchasers who are looking to keep their vehicle for an extended period of time. Their full model lines do a good job of keeping customers in the family. But not only that, the two automakers also report the highest model-to-model loyalty rates in many segments. Camry and Accord stand at the very top of the midsize segment while their SUVs are also near the top of their respective segments. In fact, 44 percent of both RAV4 and CR-V trade-ins are applied toward new ones.
I believe that this does not bode well for FCA when the SUV trend shifts -- as it inevitably will. There will be no cars in the showrooms to attract the (few) buyers who remained loyal to FCA during the SUV craze.
Bottom of the Pack Suffers From Strategy Shifts
Dodge and Chrysler, under the FCA umbrella, have made long-term strategic changes to boost profitability. Both brands have undergone a product overhaul, phasing out car nameplates to focus on their light-truck offerings. Owners looking to stay in the car segment return to dealer lots with few options and consequently defect to other brands, and neither brand has many compelling SUV options for shoppers to trade up to. From a corporate standpoint, this strategy isn’t as risky as it seems since FCA's other volume brands, Ram and Jeep, have high or growing loyalty rates due to their comprehensive lineups of trucks and SUVs. In 2017, 50 percent of FCA's trade-in customers stayed within the FCA family.
Dodge and Chrysler, under the FCA umbrella, have made long-term strategic changes to boost profitability. Both brands have undergone a product overhaul, phasing out car nameplates to focus on their light-truck offerings. Owners looking to stay in the car segment return to dealer lots with few options and consequently defect to other brands, and neither brand has many compelling SUV options for shoppers to trade up to. From a corporate standpoint, this strategy isn’t as risky as it seems since FCA's other volume brands, Ram and Jeep, have high or growing loyalty rates due to their comprehensive lineups of trucks and SUVs. In 2017, 50 percent of FCA's trade-in customers stayed within the FCA family.
03-24-18, 06:35 AM
#28
Lexus Fanatic
Well, we know that Lexus, especially with the first LS400, took some of M-B's customers....that's a given, though it's difficult to come up with exact figures. Ditto when the RX300 came out in the late 90s, and took a number of what would have been the Mercedes ML base. Since 2007, Mercedes has not been itself been "failing" so much as simply having to deal with a world of more competitors (especially Audi)....and, of course, in the last couple of years, Genesis has also been added, though to compensate, Acura and Infiniti are not the force they once were.
03-24-18, 07:05 AM
#29
Lexus Fanatic
I just laugh every time I see "Consumer Reports" or "JD Power" or "US News and World Report." True story, during my review this year, ask my boss. Hey, what do you think of Gartner? This was the first and only time my boss showered me with whatever because he burst out laughing...caught him really off guard. Let's just say we all know how we can get a good rating.
edit maybe I better remove my boss' name since he's probably on this forum lol
edit maybe I better remove my boss' name since he's probably on this forum lol
03-24-18, 08:37 AM
#30
Lexus Fanatic
iTrader: (20)
Just another obvious ranking that conveniently ignores leasing, a HUGE part of the automotive landscape and GROWING.