Toyota leads the US automotive industry in retaining the highest percentage of new vehicle purchasers, according to the JD Power and Associates 2006 customer retention study.
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Now in its fourth year, the study measures the percentage of new vehicle buyers and lessees who replace a previously purchased new vehicle with another from the same nameplate. As a whole, the industry registered a slight decline in customer retention, falling to 47.9%, from 49.6% in 2005.
The study found that more than one-half of the brands included in the rankings have shown some decline in retention rates since the study’s inception in 2003.
“Declining customer loyalty results from considerable improvements in quality combined with a plethora of choices for consumers,” said JDP director of product research and analysis Neal Oddes.
“In some instances, new models, such as those in the rapidly growing crossover segment, can have a significant impact on customer retention for a brand.”
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By GlobalDataWith a 1.3 percentage-point improvement from 2005, Toyota (63.9%) replaced its own luxury Lexus brand (63.2%) in the customer retention rankings.
Toyota benefited from its reputation for exceeding customer expectations in terms of both short-term and long-term quality, which has helped to maintain the high resale value of its vehicles, as well as to expand its customer base, JDP said.
Honda retained third place at 60.3%.
BMW, improving nearly 7 percentage points from last year, jumped six places to fourth at 56.5%. This gain, the study found, was mostly attributed to improved customer service stemming from BMW’s introduction of a free vehicle maintenance policy for new purchasers.
Bolstered by a 15 percentage-point increase from 2005, Suzuki achieved the largest gain in customer retention among all brands with a 23 percentage-point overall gain since the study’s inception in 2003. JDP said several factors contributed to Suzuki’s improving loyalty rates, including improved short- and long-term quality, as well as the introduction of new models with better customer appeal. Suzuki customers are also often offered attractive purchase incentives.
Also registering robust three-year gains was Nissan, advancing 8.2 percentage points from 2003, and Lexus, which gained 7.7 percentage points.
“During the past four years, Nissan has had a remarkable turnaround in image and financial performance, due in part to stepped-up quality initiatives and improved resale values,” Oddes said.
“The benefit of this is that the brand is retaining more of its customers than it did in 2003, which is helping turn around its financial performance.”
Also worth noting is Cadillac, which, through quality improvements and a breadth of products, has achieved an increase in customer retention rates each year since 2003.
The 2006 study was based on responses from 138,630 new vehicle buyers and lessees, of which 82,274 replaced a vehicle that was previously acquired new.
