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.