What are the most automotive brand loyal markets?

12 Feb 2013 IHS Markit Automotive Expert

With the economy continuing to strengthen, more and more vehicle owners are in the market and actively shopping for new cars. With automotive sales approaching pre-recession levels, I wanted to review the Designated Market Areas (DMAs) displaying the highest brand loyalty.

For this question, I decided to focus on DMAs that had the highest level of owners that returned to market and acquired a new vehicle during 2012 (through November). The chart below shows the results with the grey bars accounting for the return to market (RTM) volume of the shoppers within the DMA. The red dot points reflect the percentage of those owners staying loyal to their respective owned brands (plotted on the secondary axis).

In terms of DMAs having more than 100,000 owners returning to market and making a new vehicle acquisition, only Detroit, New York, Miami, Boston, and Dallas achieved brand loyalty rates that exceeded the national average of 48.7%. On the flipside, the volume markets that underperformed the national average were Philadelphia, Houston, Chicago, Washington D.C., Los Angeles and San Francisco.

The Detroit DMA achieved the highest brand loyalty in the nation, likely driven by it being home to the Big 3 automakers (GM, Ford, Chrysler Group) and the access to friends and family vehicle purchase incentives.

The key takeaway for me is that vehicle owners on the western side of the country have a higher likelihood for defection than anywhere else in the country. The California markets display the lowest brand loyalty rates, but Seattle as well as Phoenix also underachieve the national average.

For OEMs wanting to improve brand loyalty, more focus on loyalty programs, lease pull-ahead programs and incentives should be emphasized in these underperforming markets.

Posted by Bashar Cholagh, Loyalty Management Practice, Polk (02.13.2013)


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