March 1, 2007
Retaining young buyers is difficult for automakers, study says
Toronto, Ontario – A study by J.D. Power and Associates found that while buyers aged 16 to 35 accounted for only 27 per cent of all new-vehicle transactions in Canada in 2006, they are a coveted demographic. However, the study also found that they are very difficult to retain.
The common theory for the popularity of this age group is that “attracting young buyers makes financial sense, since they can retain them at a lower cost than what it would take to repeatedly attract new buyers,” the study says. But the data indicates that only four of the ten franchises with the greatest success in initially attracting young buyers – Mazda, Mitsubishi, Honda and Kia – also rank high in retaining them.
Five of the top ten franchises that attract young buyers – Mini, Volkswagen, Jeep, Subaru and Saab – are not able to hold on to them when they trade. With the exception of Volkswagen, less than one-fifth of the buyers of these brands trade for another product from the same automaker.
“On the other hand, the Dodge, Kia, Ford, Toyota, Mitsubishi and Hyundai nameplates are all able to retain more than four of every ten young buyers, even though these marques do not rank high in initially appealing to them,” the study concludes.