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Research Company Reports: Lexus Ranks Highest in Customer Retention
Vehicle Quality and Customer Service Experiences Play Key Roles in Influencing Customer Retention

WESTLAKE VILLAGE, Calif., Dec. 8 -- Lexus leads the industry in retaining the highest percentage of new-vehicle owners, according to the J.D. Power and Associates 2005 Customer Retention Study(SM) released today.

The study, now in its third year, measures the percentage of new-vehicle buyers and lessees who replace a vehicle that was previously purchased new with a new vehicle from the same nameplate. With a 3.5 percentage-point increase from 2004, Lexus ranks highest, retaining 63.0 percent of its customers. The industry average is 49.6 percent.

Lexus is followed in the rankings by Toyota (62.6%), Honda (59.9%), Chevrolet (57.3%) and Hyundai (56.3%), respectively.

"By satisfying its customers on many different levels, Lexus consistently enjoys high retention rates," said Neal Oddes, director of product research at J.D. Power and Associates. "Customer retention is extremely valuable in the auto industry because it costs manufacturers less to keep existing customers than to attract new ones, and strong retention fosters favorable word of mouth."

Although Suzuki retains just 28.6 percent of its customers, the brand records the greatest improvement, increasing its retention rate by 38 percent from 2003, which was the inaugural year of the study. Acura is also enjoying strong increases in retention rates, improving 25 percent from 2003 to retain 45.7 percent of its customer base in 2005.

"Suzuki has made tremendous strides in better retaining its customers, due partly to the fact that it has expanded its lineup to include more segments of the market, which offers buyers a wider variety of models in different segments as their needs and wants change over time," said Oddes. "Suzuki has also been focusing heavily on quality, improving its performance in the J.D. Power and Associates Initial Quality Study(SM) by 35 percent over the past five years."

The study finds that quality and customer service experiences play key roles in influencing customer retention. About 23 percent of respondents did not buy a vehicle from the same brand because they felt that too many things went wrong with their previous vehicle. In fact, the nameplates with the fewest customers leaving for this reason also performed relatively well in the J.D. Power and Associates 2005 Vehicle Dependability Study(SM), which measures problems experienced during the first three years of ownership.

Experiences with the dealer service and sales departments also have an important impact on whether customers return to the brand when they are in the market to buy a replacement vehicle. Nameplates performing well in the firm's 2005 Customer Service Index (CSI) Study, which measures satisfaction with the service department, and the 2005 Sales Satisfaction Index (SSI) Study, which measures satisfaction during the new-vehicle sales process, tend to have relatively few customers who cite poor service as a reason for defecting to another brand.

"Although acquiring new customers is an integral part of any O***s strategic plan, strong nameplate retention is essential to grow and expand its customer base over time," said Oddes. "Manufacturers cannot underestimate the power of excellent service and short- and long-term quality in convincing their customers to come back to the brand time and again."

The 2005 Customer Retention Study is based on responses from 177,941 new-vehicle buyers and lessees, of which 106,275 replaced a previous vehicle that was originally acquired new.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

http://www.theautochannel.com/news/2...08/164791.html

encore888

We're one of those Lexus repeat customers...and apparently that's quite normal

Gojirra99

Lexus-Toyota 1-2

Good job Hyundai too

XeroK00L

Link to the official PR here:

http://www.jdpower.com/news/releases...asp?ID=2005249

And the full ranking...other brands aren't even close!

bruce van

Mazda is second to last! That is a surprise. I used to cruise the Mazda Miata & 6 forums all the time and there are a lot of Mazda fans there who have multiple vehicles.I

I wonder if there is a study that says which manufacturers people defect to. I'm sure a lot of the BMW and Mercedes owners go to Lexus. I'd be really interested in knowing those numbers.

-J-P-L-

Izuzu isn't looking to promising!

BMW Is only at the industry average.

jrock65

Infiniti's low percentage makes sense. Their products sucked 4 to 5 years ago so most of their buyers right now are first time buyers. Look for that retention rate to go way up in a few years time as their products have improved 10 fold.

Gojirra99

That's why I think Hyundai did great because their products also suck not too many year ago , but their customers still sticking with the brand when they buy new cars in 2005.

encore888

Lexus and Toyota both have great vehicle lines, where customers can 'start small' and move their way up...because the quality is excellent at all levels.

AJL0365

i agree with you on that one infinit cars did suck but now they are good (especially the G and M) saw one of those grill-less Q in white today, waste of metal, allunimum w/e.

but nice to see Lexus is #1 once more.

was considering staying in the Toyota/Lexus family when trading in my 02 camry but the acura TL stole my heart when i saw it in A-spec package. was about to cry when i left that car, so beautiful

flipside909

I'm shocked that Inifniti had one of the lowest retention rates compared to it's own parent company. Interesting.

mmarshall

There is a reason for that. Though, admittedly, their products are not for everyone, dollar for dollar, Hyundai and Kia give you more than just about any other automaker, though, admittedly, Lexus is still the overall best in the quality department and Subaru is the value leader in AWD.

Ford and Chevy ranking that high? I think that is mostly the fanatially loyal F-150 and Silverado buyers....both trucks sell in enormous numbers. That group is harder to crack than the Rock of Gibraltar.

jrock65

Why is that so shocking? I'm surprised that it's even 30%. I'd have expected like 10% or something.

It makes sense that most people buying Infinitis now had never owned an Infiniti before. It's not only that their products sucked 4 years ago, but that almost all of their current products are first generation products in new segments for them.

The G35 Sedan is a brand new line (Has nothing to do with the old G20, only the moniker).
The G35 Coupe is a brand new line.
The FX is a brand new line
The M is a brand new line.
The QX56 is a brand new line. (Has nothing to do with the old QX4, only the moniker).

The I35, which had been the volume seller 4 years ago, doesn't even exist now.

Infiniti has stated that most of the buyers for these cars will be conquest sales because they had never been in that segment before.

The retention rate should be much higher about 4 years from now, when owners of the first generation G, FX, M and QX start trading in their cars for the second generation or a step-up model.

mmarshall

I agree with flip...perhaps the biggest surprise on the board is Infiniti's low showing even with their high level of customer service. My guess is that it is the rather disappointing interiors and paint jobs on several of their newer models. However....some of the interior problems have been dealt with quite effectively on the new M-series. We'll see in the future how they do.

mmarshall

See my response to flip's post.
I do agree...the I35 was a nice car, with good fit-and-finish, and perhaps should not have been dropped. However, the new M-series easily makes up for that, at least in the interior and powertrain, and with an AWD option like on the G35X.