When It Comes to Autos, Loyal New Yorkers Are Hard to Find
19 April 2000
When It Comes to Autos, Loyal New Yorkers Are Hard to Find; Polk Study Reveals Low New Vehicle Buyer Loyalty Rates for New York Market Area NEW YORK, April 19 A recent study conducted by The Polk
Company indicates that New Yorkers are not the most loyal bunch, specifically
to auto manufacturers.
Despite having one of the nation's largest new vehicle buying populations,
New York ranked close to the bottom in terms of make loyalty by consumers,
with a rate of 38.3 percent. It also ranked below average in each of the
manufacturer-type categories, including Domestic, Asian and European.
"This particular finding was somewhat surprising, considering the strong
market share performance of European manufacturers on the East Coast," said
Karen Piurkowski, Polk's Director of Loyalty. "The high concentration of new
vehicle buyers in New York, combined with low loyalty rates, means
manufacturers and dealerships must work very diligently to retain customers in
that area. In other areas, like the Midwest, the average make loyalty rate is
up to 50 percent higher than New York," she added. "This should make New York
an area for focused improvements for manufacturers, since small increases in
customer loyalty could translate into larger incremental retail gains."
Make Loyalty Rates For Top 10 Market Areas#
Designated Market Area (DMA) Asian Domestic European
Rate Rate Rate Total
Los Angeles 41.4% 43.9% 36.1% 42.2%
New York City 38.7 39.0 33.4 38.3
Detroit 38.6 58.4* 31.3 56.9*
Chicago 39.4 43.3 35.4 42.2
Philadelphia 40.0 41.8 38.9* 41.2
San Francisco/Oakland/San Jose 36.3 38.0 33.7 36.9
Dallas/Ft. Worth 33.6 47.1 32.5 43.4
Boston 43.1* 42.4 35.3 42.1
Houston 34.8 44.9 31.8 41.9
Washington, D.C. 37.6 40.2 31.9 38.8
U.S. Average 39.1 47.0 34.4 44.4
Source: Polk's Manufacturer Loyalty Excelerator(TM)
*Leader #Based on number of new vehicle buyers during 1999 model year.
Lima, Ohio had the highest make loyalty of the 210 market areas analyzed.
Lima's rate was 64.0 percent, with nearly two-thirds remaining loyal to their
vehicle manufacturer. Another Midwestern market area, Detroit, was highly
ranked in terms of size (third) and make loyalty rate (sixth). The higher
loyalty rate in Detroit and the other Midwestern areas may be due, in part, to
the heavy presence of automotive employee incentive programs.
The market area with the lowest make loyalty rate in the U.S. was the San
Francisco/San Jose market area of California. The average make loyalty rate
in San Francisco was 36.9 percent, with only one-third of all new vehicle
owners remaining loyal to their make during the 1999 model year.
"Manufacturers who are aware of, and react to, geographic variances in
loyalty performance for their brand are more likely to be successful in
retaining customers," said Piurkowski. "If plans are developed to boost rates
in the weaker market areas -- through event marketing, direct mail campaigns,
or aggressive rebate programs -- a manufacturer is more likely to gain control
of its overall U.S. performance. Regular monitoring of loyalty performance by
geographic area is critical to reaching higher levels of profitability."
Polk's study measured loyalty by examining all consumer new vehicle buying
and leasing activity during the 1999 model year, during which more than 5
million households were analyzed using Polk's proprietary household loyalty
methodology. Household loyalty is measured by examining those new vehicle
owning households who returned to market during the 1999 model year to
purchase or lease a new vehicle.
Polk is a global company, delivering multi-dimensional marketing
information solutions to the automotive industry to enhance the relationships
consumers have with brands. Through lifetime understanding of individuals,
Polk helps its clients maintain current customers, win new ones and build
their brand loyalty. The company has served the automotive industry for 78
years and is the longest-standing steward of automobile records in the United
States. Founded in Detroit in 1870, Polk launched its motor vehicle
statistical operations in 1922 when the first car registration reports were
published. It now serves nearly every segment of the motor vehicle industry
as an analytical consultant and statistician, a provider of database-marketing
services, a supplier of vehicle histories and a data enabler for geographic
information systems. Based in Southfield, Mich., Polk is a privately held
firm that employs more than 2,500 people worldwide, currently operating in
Australia, Canada, China, France, Germany, Holland, Spain, the United Kingdom
and the United States.
