Honda and Ford Lead in Customer Retention, Kia Most Improved

by: TheCarConnection

By Bengt Halvorson

Ford (NYSE:F) and Honda (NYSE:HMC) owners, more than those of any others, are opting to get another vehicle of the same brand.

Both brands topped J.D. Power's latest Customer Retention Study, which was based on 123,601 responses from new-car buyers. In 81,350 of those cases, the car being replaced had also been purchased new by that owner.

Sixty-two percent of Ford and Honda owners remained with those brands, while Kia (OTC:KIMTF) was the most improved overall in retention. According to the survey, this year 58 percent purchased another Kia but last year, just 37 percent were repeat buyers of the brand. Mercedes-Benz (DAI) fell by five points, to 59 percent.

The Ford F-Series pickup, Ford Edge crossover, and Ford Fusion sedan drive strong customer retention for Ford, says Power, while the Accord, CR-V, and Pilot are among the strongest Honda models with strong retention.

Ford owners are even more likely than Honda owners to perceive their vehicle as fun to drive or as having good styling, which Power says has become increasingly important.

Resale value has actually become less important to shoppers; as a reason to stay loyal to a brand, as a factor, it was down ten percentage points just from 2009 -- perhaps an indication that recession worries are easing.

Raffi Festekjian, director of automotive product research at J.D. Power and Associates, said in a release with the results:

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.

Hyundai (HYMLF.PK), Lexus, and Toyota (NYSE:TOT) -- all with a 60-percent retention rate -- follow Ford and Honda. Mercedes-Benz, Kia, and Subaru (OTC:SBUOF) were also among the brands with a strong rate of retention well above the industry average of 48 percent.

Among major brands, Saab has just a four-percent retention rate, while Jaguar, Dodge (PD), Chrysler, and Scion rounded up the bottom of the list, all with 25 percent or lower retention.

J.D. Power says retention overall has improved slightly from last year; 16 of the 34 brands in the survey have improved retention from 2009, while 14 have declined or remained the same.

Retention of domestic brands rose very slightly this year, but Power points out that 69 percent of those who trade in a vehicle from a domestic brand get another domestic-brand vehicle. For import owners, 90 percent purchased another import.

Disclosure: No positions