Driving Sports

Every year, for the past six,  J.D. Power and Co. compiles a list celebrating the winners and losers in the game of customer retention. For the first time ever Honda has been crowned as the king of retention with a total of 64.7% choosing a Honda to replace their Honda, followed closely by Toyota with a 63.2% and Toyota Deluxe (Lexus) at 60.4%. Here's some more info from the release:

“Honda has historically been a strong performer in terms of customer retention, but 2008 marks the first time since the inception of the study that the brand has achieved the highest retention rate in the industry,” said Debbie Ortuño, manager of product research and analysis at J.D. Power and Associates.  “This comes at a time when all manufacturers are facing challenges presented by current market conditions, including sales declines and tight credit. In particular, Honda’s reputation for creating safe vehicles with high resale value has been instrumental in retaining owners.”

Overall customer retention declines slightly to 48 percent in 2008 from 49 percent in 2007.  In 2008, 13 of the 36 ranked brands have improved in customer retention rates from 2007, while 18 have declined and five have remained stable. Land Rover posts the greatest improvement in customer retention rates from 2007, improving by 18 percentage points in 2008. This improvement is driven primarily by incentives, attractive sales deals and the look and styling of Land Rover models.

The study finds that, among retained customers, the importance of safety, fuel economy and deals/incentives have increased as reasons for repurchasing, compared with 2007. Among conquest customers—those owners whose new vehicle replaced a vehicle of a different brand—fuel economy, ownership/maintenance costs and deals/incentives have the greatest increases in importance since 2007 in their decisions to change brands.

“In 2008, new-vehicle buyers have become increasingly concerned with monetary factors when deciding whether to repurchase a vehicle brand—a reflection of current economic conditions,” said Ortuño. “Manufacturers with vehicle lineups that adequately address these concerns will be poised to retain a greater share of customers and to win conquests.”

Customer retention will become even more critical to automakers in the coming year, as new light-vehicle sales in 2009 are projected to decline to below 12 million units.

To see exactly where your favorite manufacturer placed, click here for the PDF of the report.