Car Loyalty

JD Power just released a survey conducted between November 2007 and May 2008 on 147,238 new car buyers. The purpose was to measure the percentage of new car buyers who repurchased the same brand when they bought their new car.

The survey results show the following:
1. The industry average is 48 percent of customers repurchased the same brand as the car they are replacing.
2. Honda had the highest repurchased percentage 64.7 percent followed by Toyota at 63.2 percent, with Lexus third with 60.4 percent and Mercedes Benz fourth at 58.6 percent.
3. The three lowest were Jaguar at the bottom with 26.2 percent, Pontiac next with 27.2 percent and third from the bottom is Mitsubishi at 28.1 percent.

Apparently the Korean auto manufacturers are not happy with the repurchase percentage of their brands since both Hyundai at 46.7 percent and Kia at 32.5 percent are below the industry average. They apparently believe that because they are building a high quality automobile their repurchase percentage should be higher. Some experts have suggested the reason for the Korean automobiles having such low repurchase scores is not their cars but the purchase process and after sales service.

These same experts note that Honda's feat of coming in first was not so much a result of product quality as customer satisfaction with the after sales service.

The bottom line is after sales service (repair and parts sales) is both the highest margin component of the dealership, it is also one of the most important aspects of retaining customers.