Cash for Clunkers Program Hurt Owner Loyalty, According to Polk; Analysis Shows Dramatic Monthly Declines in Repeat Retail Vehicle Purchases
December 01, 2009
Copyright 2009 PR Newswire Association LLCAll Rights Reserved
PR Newswire
December 1, 2009 Tuesday 12:05 PM EST
LENGTH: 927 words
HEADLINE: Cash for Clunkers Program Hurt Owner Loyalty, According to Polk; Analysis Shows Dramatic Monthly Declines in Repeat Retail Vehicle Purchases
DATELINE: SOUTHFIELD, Mich., Dec. 1
SOUTHFIELD, Mich., Dec. 1 /PRNewswire/ -- The federal Cash for Clunkers (C4C) program has created an unforeseen side effect in vehicle sales relating to owner loyalty, according to recent analysis by R. L. Polk & Co. Between July and August 2009, when dealer showrooms saw increasing traffic and vehicle sales, overall loyalty rates to a manufacturer dropped nearly six percentage points. Over the same two month period in 2008, owner loyalty rates stayed relatively flat.Chrysler and General Motors experienced the largest declines, with Chrysler suffering a drop of 13 percentage points in corporate loyalty from July to August, and General Motors experiencing a drop of nearly seven percentage points during the same timeframe. Ford was the least affected of the domestic manufacturers, with a drop of six percentage points. Honda and Toyota experienced two and five percentage point declines in owner loyalty respectively based on Polk's monthly analysis. "While the Cash for Clunkers program drove sales, it also caused a lot of competitive cross-buying that hurt repeat sales to the same automaker. Our analysis supports that OEMs and dealers may not have realized the potential defections the C4C program might bring. Whether this matters in the short-term, we think long-term loyalty needs to be a constant focus," said Lonnie Miller, director of industry analysis for Polk.Industry-wide, contributing factors to the monthly spike in defections include low or depleted inventory levels of qualifying vehicles during a period of time in which attractive incentives existed for consumers, according to Polk. GM's planned phase out of Saturn may also have accounted for hurting some of the corporate loyalty GM received from these owners. For the first time in eight years, less than one in two Saturn owners are expected to stay with GM."The playing field was virtually leveled when all OEMs had the same incentives, and loyalty rates were adversely affected," according to Miller."Given what happened between July and August of this year, this should make for an interesting final quarter for our model year period that ends in September," Miller said. "With the loyalty rate drops we've seen based on Cash for Clunkers, we might expect some surprises in overall loyalty rates once results for the entire model year are analyzed."Polk tracks industry loyalty on a monthly basis. It will present its 14th annual Automotive Loyalty Awards, which recognize automotive manufacturers for excellence in customer loyalty, on January 12, 2010 during the Automotive News World Congress in Detroit. New categories to the program this year include specific loyalty awards within the African American, Hispanic and Asian categories, and a new award that will recognize 'Most Improved Loyalty'.About The Polk Automotive Loyalty AwardsThe Polk Automotive Loyalty Awards utilizes the only fact-based methodology in the industry to recognize manufacturers for superior owner loyalty performance. Loyalty is determined when a household that owns a new vehicle returns to market and purchases or leases another new vehicle of the same model or make.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 A: Monthly Industry-Wide Corporate Loyalty Rates
Month 2008 2009
----- ---- ----
January 57.45 56.97
------- ----- -----
February 55.01 55.24
-------- ----- -----
March 54.54 54.67
----- ----- -----
April 54.03 53.91
----- ----- -----
May 51.41 53.09
--- ----- -----
June 52.31 55.69
---- ----- -----
July 52.12 51.04
---- ----- -----
August 52.67 45.58
------ ----- -----
September 54.73
--------- -----
October 54.83
------- -----
November 53.92
-------- -----
December 54.99
-------- -----
This table shows month-to-month loyalty rates in 2008 and available information for 2009.Available Topic Expert(s): For information on the listed expert(s), click appropriate link.Lonnie Miller
https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=90994
SOURCE R. L. Polk & Co.
CONTACT:Michelle Culver, John Bailey & Associates, +1-248-362-4200 ext. 295, mculver@baileypr.com http://www.prnewswire.com
LOAD-DATE: December 1, 2009
 Denotes premium content. Learn more about becoming an Insider here.
Please enable Javascript
|
