While consumers consider many factors when deciding on the next car to buy, their own previous experience is perhaps the most significant one. Some car brands command high customer loyalty, while others command very little.
According to data provided by Kelley Blue Book, a car valuation company, the car brand customers own may determine what vehicle they buy in the future. A brand's loyalty rating is determined by current owners' intentions to buy a car of the same make again. Based on the loyalty rating of 33 car makes, these are the nine car brands with the least loyal customers.
The car makes with the most loyal customers also tend to have strong sales. Ford (F), Honda (HMC), and Toyota (TM) — brands that keep at least 50% of their customers coming back on average — are also among the best selling brands in the United States. On the other side of the spectrum, brands with poor loyalty also tend to have poor sales. While the likes of Ford and Toyota all reported hundreds of thousands of unit sales in the first half of 2014, six car brands on our list reported less than 100,000 unit sales over that time.
Consumers often change brands regardless of whether their experience with a vehicle was positive or negative. Such shifts can be due to changes in the economy as well as changing preferences among consumers. Arthur Henry, senior manager of market intelligence at Kelley Blue Book, pointed out to increased fuel efficiency and higher wages for many Americans as some of the reasons SUVs, for example, have become more popular in recent years.
Henry told 24/7 Wall St. that price is perhaps the most important factor in the consumer's decision-making process when buying a car. In addition to price, Henry explained, consumers look to reliability when selecting a vehicle. "Brands that exude durability or reliability are seen as trusted brands and [are] very high in our shopper loyalty metric," said Henry. Six of the nine makes with the worst loyalty ratings had more problems reported per 100 vehicles than the industry average of 133, according to car rating company J.D. Power's Vehicle Dependability study.
Two makes with low brand loyalty, Jaguar and Buick, were actually rated relatively well on J.D. Power's Vehicle Dependability study, with 132 and 112 problems reported per 100 vehicles, respectively. While Jaguar's ratings are good and sales have actually been on the rise, Henry explained that "it is very hard for shoppers to get back into Jaguar because of the price point — (Jaguar) has the highest price point among luxury brands."
To make matters worse, the entry luxury market is extremely competitive. Two brands — BMW and Mercedes Benz — are among the largest players in the U.S. luxury car market, which is extremely crowded. In other words, fierce competition may explain poor loyalty among some luxury brands, rather than issues of quality.
A number of manufacturers have several car brands on this list. Dodge and Chrysler, for example, are both owned by Fiat Chrysler Automobiles. According to Henry, consumers are largely aware of this. "Shoppers do understand the concept that those two makes are together," and because they are aware of this, they may leave a brand, yet still knowingly buy a car made by the same manufacturer. On the other hand, they may leave the manufacturer altogether after a bad experience with one brand.
24/7 Wall St. reviewed Kelley Blue Book loyalty data on 33 car makes over the last two-and-a-half years. Kelley Blue Book provided the percentage of car owners in each quarter since the beginning of 2012 planning to buy a vehicle of the same make again. To find the brands least able to retain their customers, we took an average across each quarter through the second quarter of this year. Kelley Blue Book also provided total unit sales for each car make. Quality measures came from J.D. Power's Automotive Performance & Design (APEAL) study, which measured satisfaction after 90 days of ownership on a 1,000 point scale, and from J.D. Power's Vehicle Dependability Study, which measured the number of complaints by make per 100 vehicles for new owners as well as those who have owned a vehicle for three years.
These are the vehicle brands that can't keep customers.
1. Mitsubishi
> Average loyalty: 21.77%
> 2014 Vehicle sales (Jan. – Jun.): 39,672 (9th lowest)
> Dependability – problems per 100 vehicles: 166 (6th highest)
> Manufacturer: Mitsubishi Group
Not only have less than 22% of Mitsubishi owners said they intend to buy another Mitsubishi over the past two years, but the brand's loyalty rating fell 16% between the second quarters of 2012 and 2014, the largest decline of any make. Despite receiving among the worst ratings from J.D. Power's dependability study — 166 problems were reported per 100 vehicles — Mitsubishi sales have rebounded in recent years. Between the first halves of 2013 and this year, vehicle sales rose 30.2%, more than all but one other brand reviewed by Kelley Blue Book. According to Henry, Mitsubishi is "very niche in terms of what they offer — they have a lot of small cars, and small SUVs," so when owners look for a different type of car they turn to other brands like Toyota.
2. Chrysler
> Average loyalty: 22.72%
> 2014 Vehicle sales (Jan. – Jun.): 141,068 (17th lowest)
> Dependability – problems per 100 vehicles: 155 (9th highest)
> Manufacturer: Fiat Chrysler Automobiles
Chrysler, like Dodge, is owned by Fiat Chrysler Automobiles, and has had relatively strong sales in recent years. However, sales dropped nearly 14% between the first half of 2013 and the first half of this year year, from 163,839 to 141,068 — one of the largest declines among brands reviewed. Chrysler's large sales drop and relatively poor ability to keep its consumers coming back may be due to tough competition and lack of variety among models. Fiat Chrysler Automobiles owns a number of other brands, which shoppers may be switching to as well. The manufacturer owns Ram, for instance, which has posted impressive sales figures in recent years and is the leader in customer loyalty.
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3. Dodge
> Average loyalty: 22.88%
> 2014 Vehicle sales (Jan. – Jun.): 306,924 (8th highest)
> Dependability – problems per 100 vehicles: 181 (2nd highest)
> Manufacturer: Fiat Chrysler Automobiles
Dodge sold nearly 600,000 vehicles in the U.S. during 2013, among the highest sales figures and a 13.6% increase from 2012. However, Dodge sales were down 3.6% over the first half of this year compared to the same period last year. Dodge's affordable compact sedan, the Dart, has performed particularly well, posting its highest June sales figure ever. Dodge's selling point may be affordability since dependability ratings for Dodge models are relatively poor. For every 100 vehicles, 181 problems were reported, according to J.D. Power, among the highest complaint rates. Less than 23% of Dodge owners over the past several years on average intended to buy another one.
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4. Jaguar
> Average loyalty: 25.45%
> 2014 Vehicle sales (Jan. – Jun.): 8,317 (2nd lowest)
> Dependability – problems per 100 vehicles: 132 (13th lowest)
> Manufacturer: Tata Motors
On average, just 25.5% of Jaguar's customers said they intended to return to buy another vehicle over the last few fears. Among luxury brands, Jaguar customers have been the least likely to remain loyal. Less than 17,000 Jaguars were sold last year, among the lowest unit sales of any car brand. Compared to the year before, however, the company's sales were up more than 41%, the largest spike in sales among all the brands reviewed. Compared to other brands on this list, Jaguars also had relatively few problems reported per 100 vehicles and nearly the best rating on J.D. Power's APEAL report. Dramatic sales increases may indicate there were high volumes of first-time buyers. With the sales jump, there may be a new generation of Jaguar enthusiasts and loyalty ratings may finally increase.
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5. Scion
> Average loyalty: 25.79%
> 2014 Vehicle sales (Jan. – Jun.): 30,636 (8th lowest)
> Dependability – problems per 100 vehicles: 153 (10th highest)
> Manufacturer: Toyota Motor Corporation
Even as the U.S. auto market is on the rise, Toyota Motor's Scion continues to struggle. Brand loyalty was only 25.8% on average over the last several years. Unit sales over the first half of 2014 fell by more than 12% compared to the same time the year before. Scion has been somewhat successful in the niche small and compact car market. However, consumer tastes have recently gravitated towards larger, higher-priced models. According to J.D. Power, owners reported more than 150 problems per 100 vehicles, among the worst ratings. The Scion was also rated lower than all but four other cars reviewed on J.D. Power's APEAL study. As Kelley Blue Book's Henry explained, while Scion's brand loyalty is poor, the brand may be serving its purpose of turning a young Scion purchaser into a future loyal Toyota customer.
24/7 WALL ST.:
24/7 Wall St. is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.
Source : http://www.usatoday.com/story/money/cars/2014/08/17/cars-most-likely-to-be-dumped/14121469/
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