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Finance a factor in auto loyalty

News, 06 January 2016
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SCHAUMBURG, ILL: Auto manufacturers are seeing an increase in loyalty among consumers, a new report has found, and, beyond the merits of individual brands, finance options have a role to play.

An analysis by Experian Automotive looked at nearly 6.8m household repurchase events that occurred between October 2014 and September 2015. This found that Subaru lead all brands and manufacturers, with 67.7% of consumers who own a Subaru returning to buy another one.

Ford was top among multi-brand manufacturers, with 67.5% of consumers who own a Ford remaining loyal to the Ford family when purchasing a new vehicle.

Among manufacturers, Subaru, Ford, Toyota and GM held the top four spots for loyalty, with only 0.5 percentage points separating them.

In terms of brands, Subaru and Ford (667%) again topped the list, with Toyota (63.5%) in fourth place. Sandwiched between them in third place was Mercedes-Benz (65.1%), which also ranked first for luxury brands.

Going one stage further to individual models, Experian reported that loyalty rates cut across the luxury and non-luxury spectrum.

The top four were luxury brands — Land Rover Range Rover, Mercedes-Benz S Class, Lincoln MKZ and Mercedes-Benz 2500 Sprinter Van. And five non-luxury models also made the top ten: Nissan Leaf (fifth), Dodge Ram 1500 (sixth), Hyundai Genesis (eighth), Kia Soul (ninth) and Subaru Forester (10th).

"It's exciting to see that manufacturers' efforts to improve owner loyalty are working," said Brad Smith, director of automotive statistics and consulting at Experian.

"Over the last few years, loyalty rates have increased, and these improvements are key to the industry," he added.

The study found that those consumers who leased vehicles were more loyal: 69% remained loyal to a brand, compared with 56.9% of consumers with loans.

And captive finance contracts – with Ford Credit or Toyota Financial for example – were also likely to result in greater brand loyalty. Some 63.8% of consumers financing purchases this way repurchased the same brand, compared with 58% of consumers with loans from independent banks.

Smith noted that understanding rates of consumer loyalty helped drive better business decisions, "such as a dealer selecting inventory and targeting advertising or a manufacturer making adjustments to a vehicle's design and creating more competitive promotional strategies".

Data sourced from Experian Automotive; additional content by Warc staff

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