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Power and Associates Reports: Honda Ranks Highest in New-Vehicle
As New-Vehicle Sales Continue to
Fall, Customer Retention Becomes Critically Important
WESTLAKE VILLAGE, Calif. - Honda
leads the automotive industry in retaining the highest
percentage of new-vehicle purchasers, according to the J.D.
Power and Associates 2008 Customer Retention Study(SM) released
Now in its sixth year, the study
measures the percentage of new-vehicle buyers and lessees who
replace a previously purchased new vehicle with another from the
Improving by nearly two percentage
points from 2007, Honda leads the customer retention rankings
(64.7%), followed by Toyota (63.2%) and Lexus (60.4%).
"Honda has historically been a
strong performer in terms of customer retention, but 2008 marks
the first time since the inception of the study that the brand
has achieved the highest retention rate in the industry," said
Debbie Ortuno, manager of product research and analysis at J.D.
Power and Associates. "This comes at a time when all
manufacturers are facing challenges presented by current market
conditions, including sales declines and tight credit. In
particular, Honda's reputation for creating safe vehicles with
high resale value has been instrumental in retaining owners."
Overall customer retention
declines slightly to 48 percent in 2008 from 49 percent in 2007.
In 2008, 13 of the 36 ranked brands have improved in customer
retention rates from 2007, while 18 have declined and five have
remained stable. Land Rover posts the greatest improvement in
customer retention rates from 2007, improving by 18 percentage
points in 2008. This improvement is driven primarily by
incentives, attractive sales deals and the look and styling of
Land Rover models.
The study finds that, among
retained customers, the importance of safety, fuel economy and
deals/incentives have increased as reasons for repurchasing,
compared with 2007. Among conquest customers -- those owners
whose new vehicle replaced a vehicle of a different brand --
fuel economy, ownership/maintenance costs and deals/incentives
have the greatest increases in importance since 2007 in their
decisions to change brands.
"In 2008, new-vehicle buyers have become
increasingly concerned with monetary factors when deciding whether to
repurchase a vehicle brand -- a reflection of current economic
conditions," said Ortuno. "Manufacturers with vehicle lineups that
adequately address these concerns will be poised to retain a greater
share of customers and to win conquests."
Customer retention will become even more
critical to automakers in the coming year, as new light-vehicle sales in
2009 are projected to decline to below 12 million units.
"Educating potential buyers about models
that have good fuel economy and low ownership costs will help
manufacturers retain their customer base and attract new customers,
particularly for those brands that may be curtailing new-model
introductions and redesigns, which traditionally generate customer
interest," said Ortuno.
The 2008 Customer Retention Study is based
on responses from 147,238 new-vehicle buyers and lessees, of which
88,971 replaced a vehicle that was previously acquired new. The study
was fielded between November 2007 and May 2008.
2008 Make Retention Rates
Land Rover 49.0%
Industry Average 48.0%
Base: The percentage
of customers who replaced a vehicle previously purchased new and
acquired a new vehicle of the same make.
(Dec. 10, 2008)