Why Brand Loyalty Is Fading Among Car Buyers

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In generations past, there were Ford families, and there were Chevy families. Switching allegiances was akin to converting to a new religion, or voting for the Democrats after being raised in a stalwart GOP household. The truth is that sticking with any auto brand simply because of tradition never really made sense. As market forces, industry standards, and automaker innovations destroy age-old assumptions about car brands, blind loyalty seems sillier than ever.

According to data from Experian, a large chunk of car buyers can still be described as brand loyal: In the second quarter of 2012, 47.3% of new Toyota purchases were made by consumers who previously owned another Toyota vehicle (Scion, Lexus, or the flagship brand). That percentage leads all automakers. But neither Toyota nor any other car manufacturer should expect customers to cling to any specific auto brand, and here’s why:

We’re buying cars less frequently. The average car on the road is old—over 11 years old, compared to 8.4 years in the mid-1990s. Cars are being kept in action longer for a variety of reasons, including the fact that they’re built to last (getting 200,000 miles out of a vehicle is fairly commonplace), and that the troubled economy has made many consumers reluctant to upgrade to a new car when their old one still runs OK, or is fixable.

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Even as new-car purchases increase in 2012, data from the auto research firm Polk indicates that the trend for Americans to hang onto cars longer is here to stay. Not long ago, drivers were accustomed to hopping behind the wheel of a new car every four or five years. Today, the average driver is expected to purchase 9.4 new vehicles over the course of a lifetime, down from 13 in the heyday before the Great Recession.

If a driver wants a new car three or four years after purchasing one, it’s likely he’ll stick with the same vehicle, provided he’s been happy with its performance and reliability. On the other hand, if the upgrade is taking place eight or nine years after a new car purchase, the odds are higher that his lifestyle—and what he needs in terms of a vehicle—have changed. The consumer may have started a family, for instance, and now needs a larger car to haul the little ones around town. In this case, the consumer is more apt to not only shop around for a new category of vehicle (SUV vs. sedan), but also browse among brands as well. As Anthony Pratt, Polk director of forecasting, explained to CNBC:

“It’s more difficult to retain a buyer, especially if they’ve changed stages in their lifetime,” Pratt said. “Their needs for a vehicle may have changed, so they may abandon the brand they’ve driven for many years.”

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We shop around constantly, even in the dealership. With the ubiquity of smartphones, car shoppers no longer have to accept the word of an auto dealership salesperson when hunting for information. According to a J.D. Power survey, 53% of consumers say they access content about cars—reviews, lists of model options, website and incentive offers from competitors—while they’re in person at the dealership. Nearly all consumers in the market for a new car, meanwhile, conduct research online before heading to any dealership. Millennials are particularly like to arrive at the auto lot loaded with information that’ll help them make a decision.

What this all means is that shoppers are not nearly as set in their ways as generations past when it comes to car buying. They’re open to exploring all of their options, and the more they shop around, the more likely they are to “switch sides” and go with a new automaker when the time comes to purchase a car.

The industry is changing rapidly—and so are auto brands. The post-recession, post-bailout, high-gas price era is filled with innovation, and age-old assumptions about brands often no longer hold up.

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Ford, long thought of primarily for heavy, powerful trucks, SUVs, and muscle cars, has been reinventing its brand by offering lighter vehicles—even with its best-selling F-150 trucks—and much better fuel economy across the fleet. While Nissan and Chevy have a headstart in electric vehicles with the Leaf and Volt, respectively, and Toyota is the obvious current king of hybrids thanks to the Prius, Ford wants to challenge in both categories with its new C-Max. It’s available in hybrid and plug-in hybrid models with impressive numbers—including a driving range of 620 miles and an equivalent of 100 mpg for the latter.

Going forward, all automakers face tougher fuel economy requirements in the U.S., and the pace of innovation is likely to speed up across the board. One expert explained to the Detroit Free Press:

“We tend to greatly underestimate the pace of innovation,” said Bill Visnic, Edmunds.com senior editor and analyst. “It’s not outlandish at all to expect cars rated at 40 to 50 m.p.g. in combined driving 10 years from now.”

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Which brands will do the best job of meeting mileage requirements down the line, while also producing cars that best meet the needs of drivers? We don’t know for sure. But considering how quickly things have changed in recent years, and how much change is expected in the years to come, there’s a decent chance that the brand of car you’ll want in ten years will be different than the one in your garage right now.

11 comments
TeamPontiacWidetrack
TeamPontiacWidetrack

I could care less about fuel mileage at this point. My current car is a Hyundai Accent and it wasn't even a year or so later that I find out that they inflated the EPA ratings on my car and several others in their lineup. Since that point i find myself growing frustrated with fuel economy because i constantly have to adjust my technique. Even when i do get it i don't know if it really is that good. My first car was a Pontiac Sunfire and i never had this problem with it. I used to be a GM loyalist but without Pontiac I find myself having to choose between tolerating their presently mediocre product lineup or staying with Pontiac no matter what. Pontiac had considerably better cars than Buick and sold more of them. Most of GM's best cars come from either Chevrolet or Cadillac now, except they're too expensive now. I would rather spend my money on a decent-performing pre-owned car than on an over-teched, 40-mpg-chasing disappointment.

SkyMKinley
SkyMKinley

Used to be a Chevy girl..just like my dad and my grandpa. Now they would shoot me if I dared to trade in the Chevy dad bought me for another Chevy hah! I've been looking around and I'm pretty sure .. I'll just fix the truck my dad gave me instead of buying a new vehicle. It doesn't seem worth it to me to spend 30 grand or even 60! on a stupid vehicle. I've got better things to do with my money.

Amanda
Amanda

I always have bought Dodge and probably always will. My first car was a 95 Neon, and I owned 4 different ones of those. I will say I had an amazing experience with a Thunderbird- it was a reliable, easily fixed, tank of car and I put it through hell until the wheels literally fell off, but I always go back to Dodge. I have come to expect reliability, good repair costs over time, decent resale values and unlike some people who love gps and mp3 and bluetooth and all the bells and whistles, I LOVE that Dodge still keeps the interiors simple. I've got enough distractions on the road- all I need to see in the car is my gas, my speed, and my temperature. I'm hoping to get a Dart once they hit the used market.

MaxMaxwell
MaxMaxwell

Did I miss something? After owning numerous vehicles over the years, they are basically the same to me. But, being a boat owning, son of a former line worker at Ford, an ex pat of Michigan, A flag flying, love mom, will stand and salute not only my flag but the people who do too. I drive a Ford Tank,(Expedition) it averages 10 MPG, it will break down with little problems here and there. Tires cost me 750 a set,  But, it's built in Michigan, not far from our old farm, it's got Ford written all over it , you know the one company who didn't take bailouts. The one company who when they make a decent profit, shares it with the line workers, janitors and office help. You know that company still in DETROIT who doesn't have to export their cars to the other 49 like chrysler. The compnay who may make  an OK car but THEY MAKE IT HERE. And as long as they do, I will be loyal at the expense of myself. Now let me tell you a litle secret about anerican cars.

"on a quiet night you can hear a chevy rust"   Now as far as the wifey poo and her choices she drives a Honda Pilot,  dollar for dollar and resale value you can't compare. don't worry one day detroit will figure it out and start to build the right stuff again, 

fefifofum
fefifofum

@MaxMaxwell As a long time Japanese car buyer, I think Ford is building the right stuff now, their current line up of focus and fusion are amazing cars, I just bought one. 

pbernasc
pbernasc like.author.displayName 1 Like

you can't keep selling junk under the same brand for generation and expect to keep sales up.

there must be a reason that explain why in California 90% or more of the in circulation are Japanese ... and the reason is simple, Japanese are better cars

fefifofum
fefifofum

@pbernasc The japanese used to make better cars, but I don't think that's the case anymore. 

jkantor
jkantor like.author.displayName like.author.displayName 2 Like

There's no American brand loyalty because Detroit destroyed their brands with crap cars. 

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PhaulkPhacebuk
PhaulkPhacebuk

I drive a 1966 Corvair Corsa as my daily driver.  Alot cheaper in maintenance and cheap on gase

nvrtalk
nvrtalk

I currently average 48mpg with biodiesel. My last tank (first tank after oil change) was 50.05mpg. 4 door mid sized sedan with wide tires. Oh yeah and it is a 2001. I am not even and inconsiderate hypermiler - I keep up with traffic.

The "innovation" for 50mpg is a decade old.

The American Automobile Industry abandoned "loyalty" decades ago in pursuit of planned obsolescence in the 1960's and 1970's.

Until they adopt a model of consumer respect and stop withholding innovation until the next model the automotive industry will never deserve customer loyalty.