Westlake Village, California – Fun-to-drive vehicles are becoming a top reason for customers to stay loyal to their brand, while expected resale value is becoming less important, according to a new study by J.D. Power and Associates.

The study, now in its eighth year, measures the rate at which automotive brands retain their existing customers and the reasons why owners remain loyal. The importance of fun-to-drive vehicles has increased by eight percentage points in 2010 compared with 2009, while the importance of resale value as a reason to stay loyal has decreased by ten percentage points. The importance of fun-to-drive vehicles has also increased as a reason why brands conquest new customers from their competitors, as has vehicle styling.

“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. “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.”

Ford and Honda are tied among the automotive brands that best retain owners, keeping 62 per cent of their customers. Ford’s retention rate is primarily driven by the Edge, F-Series and Fusion models, while Honda owners return for the Accord, CR-V and Pilot. Comparing the two, Ford owners are more likely to indicate that they remain due to fun-to-drive vehicles and styling, while Honda owners are more likely to cite resale value and safety.

Hyundai, Lexus and Toyota follow in a three-way tie, each with a customer retention rate of 60 per cent. Kia posted the highest improvement from 2009, up by 21 percentage points to 58 per cent. Overall, customer retention has remained stable from 2009 at 48 per cent.

Customer retention in domestic brands has improved slightly as a whole from 2009, but the domestic brands still lag behind import brands. In 2010, 69 per cent of owners who traded in a vehicle from a domestic brand purchased another vehicle, while 90 per cent of import buyers stayed with an imported brand.

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