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Brand loyalty is on the rise across the auto industry, as today's drivers are more likely to stick with a name they know and like more frequently than they did in the past, according to a new study by IHS Automotive.
Although there are a number of factors that can affect a brand's rating, those with a wider product portfolio tend to have higher loyalty numbers because car buyers' needs change over time. For example, a speed demon may end up purchasing a minivan to ferry the kids to school and soccer practice, or a truck owner may want to downsize to save on gas.
Some of the brands that didn't make it into the top 10 received lower ratings because of their more narrow product offering, said Thomas Libby, IHS Automotive's manager of loyalty solutions and industry analysis.
"One of those is Porsche," Libby said, adding that the brand is almost entirely devoted to small two-door sports cars. "For a 911 owner who needs a family hauler—they have to leave the brand."
Luxury carmaker Jaguar also has a slim and focused product line, and Land Rover only makes SUVs. These are desirable names, but may not have scores that reflect the loyalty their customers feel, Libby said.
Still, virtually all carmakers have customer loyalty foremost in the mind.
"It is less expensive to retain a customer than to go out and capture one from another brand," Libby said. "Both at the manufacturer level and the dealer level, they are thinking a lot about how to keep customers."
To compile its quarterly loyalty list, IHS accessed records for every car registered in the U.S. each month. The firm identified every person who purchased a new car in the last 10 years (120 months, to be exact), and found those who then returned to buy another car in the last three months.
Click through to see the auto brands with the highest loyalty ratings.
—By Robert Ferris, Special to CNBC.com.
Posted 2 July 2014
Percentage of returning customers: 51.2
Hyundai came out of the woods when its Genesis sedan started winning prestigious awards in 2009, including the North American Car of the Year award at Detroit's North American International Auto Show.
The Sonata, a core model, is a top seller for the company.
Hyundai, like its sister brand Kia, has a policy of undercutting competitors' prices while often offering many of the same features. They are also the only two brands on the market that offer 100,000-mile warranties, Libby said. For many consumers, it can be a pretty compelling combination.
Percentage of returning customers: 52.6
Lexus has the same cachet among buyers as Mercedes-Benz and BMW, while also getting a boost from parent company Toyota's reputation for reliability and durability. The brand is also famous for providing an exceptional customer experience in sales and service, Libby said.
The brand suffered damage after a large Toyota product recall in 2010, and was impacted by the disastrous earthquake and tsunami that shook Japan in 2011. Before that, however, Lexus led sales in the the luxury segment for years prior to the recall, and it's right back in the fray, Libby said.
Percentage of returning customers: 53.1
BMW is another luxury brand that has a strong following. It boasts a reputation for quality and its brand has a lot of "clout" with consumers looking for a higher-end car, Libby said. BMW offers an array of cars, as well as SUVs and crossovers, that compete well in their segments, making it a bit easier for buyers to stick with the brand.
Percentage of returning customers: 54
Honda is a bit different from fellow Japanese carmakers Nissan and Toyota. The company does not compete in every category, with only a tiny presence in trucks, for example. It also tends to move a bit more slowly in introducing new models or making changes to products.
But what it sacrifices in breadth and speed, it makes up for in consistency. Honda focuses on a cluster of core models that regularly compete for the lead in their categories. The Accord, Civic and CR-V are top sellers. The Pilot, (an SUV crossover) and the Odyssey (a minivan) are popular among families, while the Fit is a popular choice in the subcompact category.
Honda updates its models every five years, Libby said, and its loyalty score is helped by the fact that the company does not sell fleets of cars to rental agencies, which can risk flooding the market with cars and driving down prices.
Percentage of returning customers: 55.9
Subaru has recently benefited from a product portfolio that's heavily centered right in the sweet spot of the market (compact/midsize crossovers and cars) without being dragged down by products in segments that are performing poorly, such as large SUVs and large cars. The company also has a "cultlike" following of customers who seem to be devoted to their cars more so than customers of other makes, Libby said.
Models such as the Legacy, Impreza and Forester are now sized to compete effectively with the toughest competitors—Subaru is building them a bit bigger than it has in previous years. And customers are hungrier for smaller models that are nimbler and more efficient.
"Their timing could not have been better," Libby said.
Percentage of returning customers: 56.4
Chevrolet has done a better-than-reported job of weathering the scandal facing parent company General Motors, Libby said. The company had several successful product launches in the last year, including the 2014 Impala, which earned the third-highest rating for any car ever tested by Consumer Reports, behind the Tesla Model S and the BMW 1 Series coupe.
Of course, the 2014 Impala is now one of the models included in GM's latest recall.
But Chevy has also achieved some notable success with its Sonic and Spark models, especially in light of the difficulty American companies have competing in the compact and subcompact car segments.
Percentage of returning customers: 57.4
Nissan has improved its product offerings across categories—it competes in trucks, cars and SUVs, Libby said. The brand recently released an improved Versa line, which leads its segment, and the Sentra competes with the Honda Accord and the Toyota Camry.
"Their overall product portfolio is much better than it used to be," Libby said. "They are moving in the direction of Toyota in having a competitor in every category."
Percentage of returning customers: 57.8
Toyota entered the U.S. market decades ago with small and cheap models, because that was one of the few areas in which the upstart company could compete. While Toyota has retained its leadership in smaller cars, the company has grown to offer one of the most diverse lines in the industry. Japan's leading automaker makes vehicles in just about every class important to consumers, and over time it's staked its reputation less on low prices and more on reliability and durability.
There have been hiccups, though—the company famously recalled several million cars between late 2009 and early 2010.
Percentage of returning customers: 57.8
Mercedes leads the luxury car market in loyalty. The company has both a strong product line—large sedans, SUVs, wagons and sports cars—and has a lot of "clout" with buyers, Libby said. As mentioned, the company competes tightly with BMW and Lexus, but for now, Mercedes sits at the top of its hill.
Percentage of returning customers: 64
For overall loyalty, Ford tops the list.
For one thing, the company has an incredibly wide array of products—it offers everything from tiny subcompacts to pickup trucks. For another, many of those models are leaders—the F-150 is a top-selling truck, and the Mustang has survived where many of its competitors have perished or come and gone.
"If you own a Ford and want to switch categories," Libby said, "you can typically find a model that fits what you are looking for."
The company has also strengthened its portfolio over the last several years with popular additions, including the Fusion, the Escape and the Focus.
Ford's evasion of the bankruptcies and financial troubles that ailed fellow American automakers GM and Chrysler also resulted in fewer disruptions to its business.