Gadgets and connectivity are the new keys to buyer loyalty

Gadgets and connectivity are the new keys to buyer loyalty

Keeping car buyers in the fold is going to be harder in years to come, according to New York-based market research firm GfK Custom Research North America. The reason is because the younger generations do not see traditional vehicle qualities such as ride, handling and safety as a differentiator among brands. Rather, they are attracted to new features such as enhanced navigation systems, voice-activated services and internet radio, and are more likely now to jump from brand to brand to find what they want.

Gfk surveyed over 700,000 car shoppers this year who intend to buy a vehicle. About 49 percent said they would buy the same brand, but that is down from 54 percent in early 2001. Importantly, less than 40 percent of post-Baby Boomers — consumers born after 1964 — planned on staying with their present brand, according to GfK. The so-called Generation X and Generation Y contingent makes up 46 percent of the U.S. car-buying public, up from 34 percent a decade ago. GfK North America, which has been conducting its automotive shoppers study since 1980, is an arm of Germanys GfK Group, a global consumer, business and media research giant.

Brand loyalty is viewed as a major factor in automaker profitability because it costs about twice as much money to attract buyers away from another brand as to keep them, said Doug Scott, senior vice president of GfK North Americas automotive group.

If manufacturers are going to get into a race to attract [loyal] Generation X and Generation Y buyers, they’re going to do it through technology,” Scott said.

Overall, Toyota and Honda have the highest brand loyalty among the major automakers, with more than 60 percent of those vehicle owners intending to stay with the brands. GM and Chrysler had brand-loyalty ratings of about 40 percent and 35 percent, respectively. Scott said GM has the greatest potential of the two to boost its numbers, thanks to its own vehicle-connectivity efforts.

Ford also has addressed the loyalty issue the GfK report said, by introducing features such as the SYNC communications system, which was built on Microsoft’s Windows platform – although the systems early glitches recently have given Ford a reliability headache.