One of the factors for sagging domestic auto sales? According to R. L. Polk & Co., regardless of age, consumers are consistently more loyal to Asian brands, versus European and domestic makes. In addition, for all brands, owner loyalty increases as the head of household gets older.
For the 2006 model year, overall make loyalty for the industry is 44.4%. While domestic makes are close to the industry average with 43.5%, for Asian makes, it is 47.6% and European brands stand at 37.3%.
"The largest increase in make loyalty came from Asian brands, when comparing buyer activity over the past two model years," said Lonnie Miller, director of Industry Analysis for R. L. Polk & Co. "There was an additional 41% of returning Asian brand customers who bought within that vehicle community again."
While owners ages 65 and older typically rate the highest for brand loyalty (50.5%), Polk data shows they only represent 13.4% of new owners returning to market for another new vehicle. Further examination shows just over 75% of those returning to market are between 35-64 years of age, which accounts for a core buyer base to most any brand.
"Automakers and their marketing partners should consider these findings when communicating with different age groups," said Miller. "While it can't be taken as a 'cause and effect' issue, there's definitely a strong relationship between the age and the degree of loyalty we see to a given brand."
The patterns noted in the Polk analysis are relatively consistent. Examinations between 2004 and 2006 model years indicate brand loyalty across age groups rises as the age of the head of household increases.
"As consumers age and progress through different vehicles, it makes sense that they learn more and have more meaningful experiences that would cause their loyalty to increase," said Miller. "However, strong levels of cross- shopping are not always valuable to consumers, depending on the experience. In the end, this can help brand loyalty."
Minority purchases have been a bright spot in recent years' auto sales, according to another report from Polk. While personal registrations in the auto market were down approximately 1% from 2003 to 2005, new vehicle sales to minority customers were up approximately 18%. Despite the overall rise in minority vehicle sales, loyalty to a specific manufacturer is low among these groups. For example, on average, Hispanic-American customers buy from the same manufacturer 48% of the time while Asian-American customers buy from the same manufacturer just 42% of the time.
