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Jeep attracting new, repeat buyers as sales surge

Jeep, which is riding a wave of stronger sales and a resurgence in popularity, is outpacing many of its rivals in two key sales metrics.

According a report from IHS Automotive that analyzed sales in the first three months of 2014, Jeep is not only winning over more buyers from other brands, but it's also holding on to a higher percentage of its current buyers.


2014 Jeep Cherokee
Source: Chrysler
2014 Jeep Cherokee

"What Jeep is doing when it comes to retaining their current customers and attracting new buyers is extraordinary," said IHS Automotive's Tom Libby. "Its loyalty rate is up 8.1 points to 43.6 percent compared to a year ago. That's a very big jump for any auto brand."

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The new Cherokee, which went on sale in the middle of last year, is attracting new buyers from other brands five times faster than it did a year ago.

Jeep's other flagship models, the Grand Cherokee and the Wrangler, are also helping the brand, which as a whole improved its ratio of bringing new buyers to the brand by more than 40 percent.

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Loyalty was measured by the percentage of current customers that return and buy another model from a particular brand.

"Jeep has the foundation set for long-term success," Libby said.

The results come as Jeep is easily outdistancing other brands this year, with sales jumping 48.1 percent in the U.S. through May, according to the research firm Autodata. By comparison, sales for the entire auto industry are up just 4.1 percent.

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"What's extraordinary about Jeep right now is that it's outselling other brands like KIA and Volkswagen, even though those other brands have a wider variety of types of vehicles," Libby said. "Jeep doesn't sell cars, so it's effectively outselling other brands even though it is only competing in half of the market."

Earlier this year, Fiat Chrysler CEO Sergio Marchionne unveiled a five-year business plan that included a goal to sell 1.9 million Jeeps worldwide by 2018.

Because Jeep is limited to selling just SUVs and crossover utility vehicles, the brand's overall loyalty rate of 43.6 percent comes in well below Ford, which leads the industry with the highest loyalty rate of 64 percent.

"Jeep will most likely never be able to have loyalty rates as high as Ford, Chevy and Toyota because those brands have full lineups with trucks, SUVs and cars," Libby said. "For Jeep owners who decide they want a car, they have to leave the brand, so that naturally weighs on Jeep's loyalty rates."

—By CNBC's Phil LeBeau

Questions? Comments? BehindTheWheel@cnbc.com.

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