LexFather

J.D. Power and Associates Reports:
Importance of Resale Value and Vehicle Quality Increase Considerably as Reasons for Owner Loyalty

Mercedes-Benz Ranks Highest in Owner Retention

WESTLAKE VILLAGE, Calif.: 10 December 2009 -Resale value and vehicle quality have become increasingly important reasons for new-vehicle buyers to remain loyal to an automotive brand, according to the J.D. Power and Associates 2009 Customer Retention StudySM released today.

Now in its seventh year, the study measures the percentage of vehicle owners and lessees who replace a previously purchased new vehicle with another from the same brand. Retaining existing owners is critical to a brand's market success, particularly in the current challenging market conditions.

The study finds that the importance of resale value as a reason for owner loyalty has increased by 12 percentage points in 2009, compared with 2008. Meanwhile, the importance of vehicle quality has increased by 6 percentage points. In comparison, in 2008, the reasons with the largest increases in importance for staying loyal to a brand were safety, fuel economy and deals/incentives.

Resale value and quality have also increased in importance as reasons why brands conquest new customers from their competitors, as has the importance of appearance and styling.

"Although there are some signs of economic recovery, the outlook remains uncertain, so for many new-vehicle buyers, high resale value and quality are particularly important considerations that are driving purchase behavior," said Raffi Festekjian, director of automotive product research at J.D. Power and Associates. "Whether manufacturers are striving to increase loyalty or conquesting buyers from other brands, offering attractively styled models and having strong customer perceptions of resale value and quality are critical."

Mercedes-Benz ranks highest among automotive brands in retaining vehicle owners when they buy a new-vehicle, and improves their retention rate by eight percentage points from 2008 to 67 percent in 2009. Following in the rankings are Honda (64%) and Toyota (61%).

"Mercedes-Benz has steadily improved its customer retention rates during the past five years, and in 2009, has achieved the highest rate ever attained by a manufacturer since the inception of the study," said Festekjian. "In particular, customers cite the resale value and appearance and styling of Mercedes-Benz models as primary reasons to remain loyal to the brand."

Overall customer retention in 2009 has remained stable from 2008 at 48 percent. In 2009, 13 of the 36 ranked brands have improved in customer retention rates from 2008, while 20 have declined and three have remained stable. MINI and Porsche post the greatest improvements in customer retention rates from 2008, each improving by 14 percentage points in 2009. For MINI, this improvement is driven primarily by incentives and customer perceptions of resale value of the brand's models. For Porsche, the increase is due to resale value, fuel economy and quality.

The 2009 Customer Retention Study is based on responses from 128,939 new-vehicle buyers and lessees, of which 74,610 replaced a vehicle that was previously acquired new. The study was fielded between February and May 2009 and August and October 2009.

IS-SV

Interesting info and I personally can see the validity in much of the data.

GS3Tek

iTrader: (8)

that's a great to hear for MB

can't say the same if it was 2000 or 2001

IS-SV

Agreed, those were dark years for reliablity of MB's.

But try a redesigned model year 2008 MB, very different.

rominl

iTrader: (4)

also agreed. the bad time is over, the recently new mb have been greatly improved

i am surprised about audi

I8ABMR

I am surprised to see MB at the top of the list. I am going to lease a 2010 MDX tomorrow. Maybe I should look at the ML since the incentives are very aggressive like the MDX

tmf2004

iTrader: (15)

I'm surprised to at MB.. I thought those cars had issues more than others a back a few years ago. Lexus is probably where it should be on that list..

mmarshall

Look at Ford's rise.....perhaps the real story of the chart. Although the F-150 has always been popular, that was not necessarily the case with their other models....even the once-popular Taurus dwindled after the joke of a restyling in 1995.

Mercedes, even during their long years of unreliability (which, admittedly, is much better now, but still not completely over), had, and still has, a core group of faithful who will buy their products, no matter how poorly-made or unreliable. That is also the same with BMW.

It's hard to understand Saab's incredibly low rating. Their cars aren't that bad, though they lack some of the Nordic personality and body styles they had before GM took over. The one thing about Saab that impresses me least is the poor dealer network and the way that the existing dealerships are set up and run...perhaps that was a factor in the ratings.

IS350jet

I, too, am surprised at Mercedes' position on the list. It seems less than 6 months ago that Honda made headline news for being the most "loyal" car company in US history, and not by any small margin, either. I believe they were able to repeat it 16 years running. Don't know what happened. Maybe Acura screwed them up. Anyway, I'm always leery of surveys, they can be manipulated and/or interpreted in any of a billion ways.

Gojirra99

Their retention rate was still pretty high even at their worst time due to their established name and history, so when there are some evidence their quality has improved the past couple years, it's not surprising their retention rate would rise even further.

tromly

Shocked to see MB #1, even further shocking is the low retention rate for Infinity! Lexus is still #1 for me, never consider another brand.

LexFather

2008 Make Retention Rates


Honda 64.7%
Toyota 63.2%
Lexus 60.4%
Mercedes-Benz 58.6%
BMW 58.5%
Ford 52.5%
Chevrolet 52.0%
Nissan 51.3%
Subaru 50.5%
Cadillac 50.4%
Land Rover 49.0%
Industry Average 48.0%
Scion 47.2%
Hyundai 46.7%
HUMMER 43.7%
Jeep 42.8%
Suzuki 40.7%
GMC 40.6%
Lincoln 40.6%
Dodge 39.7%
Volkswagen 39.7%
Porsche 38.2%
Infiniti 37.9%
Audi 37.2%
Saturn 37.1%
Acura 37.0%
Chrysler 32.8%
Kia 32.5%
Volvo 32.5%
Buick 31.3%
Mazda 30.7%
SAAB 30.5%
Mercury 30.2%
MINI 29.3%
Mitsubishi 28.1%
Pontiac 27.2%
Jaguar 26.2%

2007

2006
http://www.blogsmithmedia.com/www.au...rretention.jpg
2005

LexFather

Lexus has dropped, Benz was always up there but had a big jump this year.

Infiniti is doing WORSE than ever at 25%.

IS-SV

That's how I see it, other car companies below par (below industry average) should take note and learn from it.

da mayor

iTrader: (2)

well being in the retail side of Infiniti for 5 years, the retention is low b/c people got into Infiniti's due to the price of the lease. Most people couldn't care if it had 206-horsepower like the Is250 or the 328-horsepowr from a G37 sedan...

it's about the cost.

Sad but true.

My personal clientele retention is at 78% but that's just my own 2000 clients