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Car buyers stay loyal to brands

July 3, 2015
About 53 percent of U.S. car buyers replaced their old car with a new car of the same brand throughout the first quarter of 2015, according to a study by IHS Automotive. Researchers say the increase in loyalty boils down to two main reasons: more models and an increase in leasing.
"The increased number of different models within brands makes it easier for households that may need a different type of vehicle to maintain their loyalty," says Tom Libby, manager of automotive loyalty and industry analysis at IHS Automotive, in a statement. "In addition, the increased popularity of leasing since the downturn has helped significantly as lessees are consistently more brand loyal compared to retail owners."
The number of different car models sold in the U.S. market has increased by 12 percent over the last 10 years, meaning car buyers have more choices from the same company when looking for a new set of wheels. Luxury brands have seen the most increase in model variety.
Vehicle leasing has grown from 14 percent of the market in 2005 to 22.5 percent this year.
When the number of car brands shrank during the recession, buyers were forced to turn to new brands. After several auto brands were discontinued, including Pontiac, Mercury and Saturn, car owners were forced to swap brands when it was time to purchase a new car.
The study also shows better quality has played a contributing factor. High expectations by car buyers for impressive new cars has forced automakers to put more effort into the quality of the car. Better cars means more loyal customers in the eyes of the buyer.