J.D. Power spotlights brand retention

Over the years, the automotive industry has learned that car customers can have a wide variety of different reasons for choosing which new or used vehicle that they'll be driving home. Some drivers only stick to used cars, while others are fiercely loyal to a particular brand. Many always buy a pickup, while some stick with American automakers. Beyond these trends there are a wide variety of reasons that drivers choose a car, whether it's resale value, safety, styling or performance.

In an effort to better understand the habits of these consumers, J.D. Power and Associates releases a Customer Retention Study every year that examines what factors a buyer finds appealing about particular brands. Building brand loyalty is one way that automakers ensure repeated sales, so the survey seeks to highlight strengths across an automaker's lineups as well as any weaknesses that they may wish to correct.

What's tricky is that shoppers' preferences can change from year to year. For example, the 2009 edition of the survey highlighted preferences that were highly tied to the tough economy at the time, such as resale value. This year, with the economy steadily improving, drivers flip-flopped in what they wanted out of their vehicle. Drivers citing resale value dropped a full ten percentage points, while "fun to drive" saw a nine-point upswing.

"Now that economic and market conditions have improved somewhat, vehicle owners are increasingly citing emotional, rather than practical, reasons for staying with their vehicle brand or switching to a different one," said Raffi Festekjian, director of automotive product research at J.D. Power and Associates. "In light of this, developing new models with attractive styling and that are perceived as fun to drive is increasingly critical for automakers in order to retain and conquest customers as the market continues to recover."

At the top of the list are two automakers with differing approaches to customer appeal. Ford and Honda both achieved a retention rate of 62 percent, meaning those drivers chose to purchase a vehicle from the automaker again. Ford respondents widely replied that their car was fun to drive or had eye-catching styling, while proponents of Honda cited safety and high resale value.

Just behind those brands was a three-way tie between Hyundai, Toyota and Lexus, at 60 percent retention. Also of interest was Hyundai's up-and-coming Kia brand, which was able to boost its retention by a whopping 21 points in 2010, up to 58 percent.

The survey also noticed a slight shift from imports to domestics. In 2009, 10 percent of drivers made the switch from an import to an American-made brand, but 2010 saw 14 percent of drivers change brands.

Drivers who are loyal to a particular brand might be rewarded for trading their car in for a model of the same type. Many dealers offer loyalty bonuses that can amount to significant discounts. And even if an automaker's new models begin to get away from the reasons a driver chose that brand in the first place, they should keep in mind that they can likely find the features they prefer on used autos.