R. L. Polk - Asian Brands See Dramatic Rise in Owner Loyalty


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Two-Year Span Shows, Regardless of Brand, Older Buyers are More Loyal

SOUTHFIELD, Mich., Jan. 10 -- 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 percent. While domestic makes are close to the industry average with 43.5 percent, for Asian makes, it is 47.6 percent and European brands stand at 37.3 percent. (See TABLE 1 for additional findings on make loyalty across age groups.)

"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 percent of returning Asian brand customers who bought within that vehicle community again."

MARKETING IMPLICATIONS

While owners ages 65 and older typically rate the highest for brand loyalty (50.5 percent), Polk data shows they only represent 13.4 percent of new owners returning to market for another new vehicle. Further examination shows just over 75 percent of those returning to market are between 35 and 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."

ANALYZING LOYALTY

For the 2006 model year, more than 6.5 million new vehicle owning households in the U.S. were examined for their loyalty, conquest and defection buying behaviors. For more than ten years, Polk has based its loyalty insights from its Manufacturer Loyalty Excelerator(TM) programs, combining registration, demographic and opinion data, representing an industry standard.

About R. L. Polk & Co.

R. L. Polk & Co. is the premier provider of automotive information and marketing solutions. Polk collects and interprets global data, and provides extensive automotive business expertise to help customers understand their market position, identify trends, build brand loyalty, conquest new business and gain a competitive advantage. Polk helps automotive manufacturers and dealers, automotive aftermarket companies, finance and insurance companies, advertising agencies, media companies, consulting organizations, government agencies and market research firms make good business decisions. A privately held global firm, Polk is based in Southfield, Mich. with operations in Australia, Canada, China, France, Germany, Japan, Spain, the United Kingdom and the United States. For more information, please visit www.polk.com.

                                 Table 1
      Loyalty to Manufacturer Origin Groups by Age - 2006 Model Year

  Age of Head of           Percentage of Returning Owners Loyal to ...
    Household          Asian Makes       Domestic Makes      European Makes
     18 - 24              43.0                39.5                32.2
     25 - 34              41.6                39.8                30.3
     35 - 44              43.9                40.7                33.6
     45 - 54              47.7                43.0                37.9
     55 - 64              50.8                45.6                41.1
     65 - 74              55.1                47.4                42.5
       75+                59.8                51.1                46.4
  Overall Make Loyalty    47.6                43.5                37.3
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