Hyundai owner loyalty grows as Toyota suffers

Toyota’s stretch of bad PR is taking its toll. The latest owner loyalty research by Kelley Blue Book’s kbb.com website finds that Toyota has dropped from the top spot, with Hyundai leapfrogging over Honda to claim the #1 position.

According to the latest Kelley Blue Book www.kbb.com Market Intelligence data, brand loyalty for Hyundai recently surpassed that of Honda and Toyota, leading Hyundai's brand loyalty to the #1 spot among car shoppers on Kelley Blue Book's kbb.com. In addition, Hyundai values have been outperforming the car segment average, and the all-new Sonata recently emerged on the kbb.com Top 10 Most-Researched New Vehicles list.

When comparing February 2010 data to Q4 2009, Korean import automaker Hyundai has seen the greatest recent increase in loyalty, with Hyundai owners looking at new models within the brand increasing by 10.4 percentage points to 56.3%. This surge leads Hyundai to the top spot in brand loyalty on kbb.com for the first time in recent history, up from third place in Q4 2009.

In the same timeframe, Toyota fell from the #1 spot to third place and Honda continues to hold steady at second place. A fewer percentage of Toyota owners are looking at new models within the brand, down 4.4%age points to 53.3%, driving Toyota loyalty to third place. Meanwhile, holding steady in second place, Honda owners looking at new models within the brand have increased by 0.7 percentage points to 55.8%.

In addition, the Hyundai Sonata recently broke into kbb.com's Top 10 Most-Researched New Vehicles list for the first time. In February 2010, the Sonata was the fifth most-researched new car on kbb.com, with only perpetual 'Top 10 Most-Researched' mainstay Honda and Toyota models such as the Accord, Civic, Camry and CR-V ahead of it.

Furthermore, according to Kelley Blue Book Values data, throughout the month of February 2010 Hyundai outperformed the overall car segment average by a healthy margin. Hyundai values increased 2% month-over-month, relative to a 0.3% increase for the entire car segment.

"Hyundai is clearly benefiting from 'a perfect storm' – a result of introducing passionate new products like the 2011 Sonata and 2010 Tucson, while Honda's mainstream vehicles like the CR-V and Accord are a bit stale in the marketplace and Toyota is experiencing a huge consumer perception crisis," said James Bell, executive market analyst for Kelley Blue Book's kbb.com.

"To sustain this momentum, Hyundai should continue to promote its attractive new-vehicle lineup, solid warranty offer and strong price-points to new-car shoppers. Hyundai's main challenge in the near future will likely come from domestic automakers like Ford and GM as they gear up for battle over buyers starting to look for a change from 'Camry-land’," said Bell.

This Kelley Blue Book Market Intelligence data analysis examined site traffic to used-car trade-in pages and new-car pricing report pages on Kelley Blue Book's kbb.com, and compared loyalty data from Q4 2009 to February 1 - 28, 2010. The Kelley Blue Book Values data within this release represents month-over-month used-vehicle depreciation percentages.

RBR-TVBR observation: Looks like a good time for Hyundai dealers to step up radio and TV advertising to increase market share. Meanwhile, Toyota needs to do the same to rebuild its brand.