Car Buyers Still Brand Loyal, Love Updates to Their Chosen Model

The more things change, the more customer loyalty stays the same. That’s one way to read the automotive loyalty numbers put out by IHS Markit. Despite the influx of new powertrain technologies and ways to buy or subscribe to a vehicle, the truth remains that if you really like a company or a brand today—whether Jeep or Mustang or Tesla—you will probably really like it tomorrow. The analyst firm said it bases its list of winners on information it gets from state registrations and actual consumer transactions, including leases.

“We hear a lot of people talk about the next generation of buyers and how ‘everything’s changing,'” said IHS Markit automotive business line leader Joe LaFeir. “I truly believe this experience is also going to endear the next generation of buyers to brands as well.”

For proof, LaFeir pointed to the electric-vehicle brand that we probably don’t even need to mention, as you already know which one it is: “This is nowhere more evident than in the loyalty rates we see with companies like Tesla,” he said. “They’ve created a cultlike following of their brand and it’s showing up in the way their consumers are coming back and staying loyal to them.”

IHS Markit has been tracking customer loyalty for over two decades and Tesla nabbed three spots on the 25th annual loyalty list. The California automaker had the highest conquest percentage (for the second year in a row), highest alternative powertrain loyalty to make, and highest loyalty rate to a make among Asian Americans.

Other brands that were named top loyalty winners include GM (overall loyalty to manufacturer), Ford (overall loyalty to make) and Lincoln (overall loyalty to dealer). Alfa Romeo was named the most improved loyalty to make, and Genesis won the highest conversion of conquests to loyalists, as defined by IHS.

Among those cars, trucks, and SUVs on a list of individual models that inspire the most loyalty are the Subaru Forester and Outback and the Ford Expedition in the “utility vehicle” category; the Toyota Tacoma, Ram 1500, and Ford F-series for pickups; the Chrysler Pacifica among minivans; and the Acura RDX, Lexus RX, and Range Rover for luxury SUVs.

IHS also compiled data on three demographic groups for “loyalty to make.” Tesla won among Asian consumers, as stated, while Toyota had the most loyal Hispanic buyers, and it split the African American loyalty top honors with Ford.

One key way for automakers to keep people buying their brand is with refreshed and redesigned models, said Tom Libby, IHS’s associate director of industry analysis and loyalty solutions, in part because dealers like nothing more than new product to talk about. In the luxury mid-size sedan segment, for example, Libby said, the typical model had around a 21.0 percent loyalty rate for the 12 months prior to a redesign but 29.5 percent in the 24 months following a redesign, for a total increase of 8.9 percent after the redesign.

“Historical registration data shows that major product redesigns positively influence model loyalty,” Libby said “The impact is substantial.”

LaFeir said that after 25 years of tracking customer loyalty in the automotive world, IHS doesn’t expect the broad outlines to change, even if the popular body styles or powertrain types do.

“Loyalty has been around for a long time, and it’s going to continue to be a key driver of our industry,” LaFeir said.

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