December 7, 2006

Toyota ranks highest in buyer retention, J.D. Power says

Westlake Village, California – Toyota leads the automotive industry in retaining the highest percentage of new-vehicle purchasers, according to a study released by J.D. Power and Associates.

The study measures the percentage of new-vehicle buyers and lessees who replace a previously purchased new vehicle with another from the same nameplate. Overall, the industry registers a slight decline in customer retention, falling to 47.9 per cent, from 49.6 per cent in 2005. The study finds that more than one half of the brands included in the rankings have shown some decline in retention rates since the study was first done in 2003.

“Declining customer loyalty results from considerable improvements in quality, combined with a plethora of choices for consumers,” said Neal Oddes, director of product research and analysis at J.D. Power. “In some instances, new models, such as those in the rapidly growing crossover segment, can have a significant impact on customer retention for a brand.”

With a 1.3 percentage improvement from 2005, Toyota (63.9 per cent) replaces Lexus (63.2 per cent) in customer retention rankings. Honda, at 60.3 per cent, retains its third-place ranking. BMW, improving nearly 7 percentage points from 2005, jumps six places to rank fourth at 56.5 per cent. The study says the gain can be mostly attributed to improved customer service, stemming from BMW’s introduction of a free vehicle maintenance policy for new purchasers.

Suzuki achieved the largest gain in customer retention among all brands, gaining 15 percentage points from 2005, and 23 percentage points since the study’s inception in 2003. Other gains were made by Nissan, advancing 8.2 percentage points from 2003; Lexus, gaining 7.7 percentage points; and Cadillac, which has achieved an increase in customer retention rates each year since 2003.

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