Edmunds analyzed 139 million vehicle transactions over 10 years

Edmunds analyzed 13.9 million vehicle transactions over 10 years.

Toyota, Subaru and Honda Win Highest Trade-In Brand Loyalty

Car segments’ overall inability to win popularity contests at dealerships will shape the auto industry’s future, study says.

Three Japanese nameplates score the highest in customer loyalty as far as consumers sticking with the same brand when trading in one vehicle for another, a new study says.

The 2018 Edmunds Trade-In Loyalty Report also looks at the long-term effect of more and more customers trading in a car for an SUV, once considered an endangered species but now a marketplace darling.  

SUV loyalty rates are stunningly high with 75% of SUV owners trading in their vehicle for another one, if not always from the same manufacturer. Conversely, passenger cars face “a crisis,” accounting for a record-low 36% of vehicles sold in the U.S. last year, Edmunds says.

“People are leaving the car segment and not coming back,” Jessica Caldwell, Edmunds’ executive director-industry analysis, says in a media conference call.

Leading the list of trade-in brand loyalty in 2017 are Toyota (63%), Subaru (61%) and Honda (60%), all up from 10 years ago, according to the study that analyzed 13.9 million vehicle transactions from 2007 to 2017.

At the bottom of the list are Dodge (19%), Smart (19%) and Chrysler (16%).

Dodge and Chrysler occupy the cellar largely because those Fiat Chrysler Automobiles brands have bailed from some car segments. For example, FCA two years ago pulled the plug on the Dodge Dart compact and Chrysler 200 midsize sedan.

“The shift away from cars left a lot of Dodge and Chrysler owners displaced,” Caldwell says, referring to the possibility of sticking with those brands at trade-in time.

Still, “FCA has done a good job of keeping people within the family, folding them into the Jeep (SUV) and Ram (pickup) brands.”

Is FCA’s leaving car segments exemplary?

“Probably not for the rest of the industry,” Caldwell tells WardsAuto. “I don’t imagine Toyota and Honda would want to get out of car segments. But Ford is doing some reassessing.”

Toyota and Honda respectively sold 1.14 million and 771,000 cars in the U.S. last year, according to WardsAuto.

Today’s SUV success is all the more impressive considering how far those vehicles have come. In the recession years of 2008 and 2009 they looked like dead ducks in the water.

Ironically, had not the recession occurred – spurring automakers to develop more fuel efficient SUV options such as car-based CUVs of various sizes – the segment might have stayed limited to buyers who preferred larger truck-based utility vehicles, says Jeremy Acevedo, Edmunds’ manager-industry analysis.

In 10 years, SUVs went from a segment of boxy gas-guzzlers to efficient car-like family haulers, forever transforming the automotive market, he says, calling today’s SUVs “a legacy of the recession.”

In contrast, car segments’ overall inability to win popularity contests at dealerships will shape the auto industry’s future.

“Manufacturers watch out for instability in customer choices,” Acevedo says, citing waves of consumers trading in cars for SUVs as a market force that will determine automakers’ lineups of tomorrow.

Caldwell adds: “We’re heading into one of the most transformative periods in the automotive industry.”       

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