SUV Loyalty Showing No Signs Of Slow Down, Reaches All-Time High

Vans, station wagons, and even sports cars – all they are now falling victim to the massive popularity of the SUV and crossover segment. Apparently, according to business information provider IHS Markit, there are no signs of slow down in the interest as loyalty numbers for this body style reached an all-time high in April.

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More than two-thirds of SUV and crossover owners who returned to the market in the first four months of 2017 purchased another new SUV or crossover, IHS Markit data reveals. The loyalty in the segment grew from 53 percent in 2012 to 66 percent in April this year, a record number. Also, the loyalty in all kinds of SUVs and crossovers is now almost 14 percentage points greater than the industry average of 53 percent.

“We collect this data and provide it to our clients once a month, but we felt that the results were so extraordinary in terms of consumer loyalty numbers for SUVs and CUVs that we wanted to publicly release it,” Tom Libby, manager of IHS Markit, headquartered in London, told Automotive News.

Another noteworthy trend, once again powered by the booming SUVs and crossovers, is the falling sedan loyalty. Back in 2012, the rating for loyalty in that segment was 56 percent, declining every year since to 49 percent through the first four months of this year. Currently, it’s below the rating for the SUVs/crossovers and the average industry rating.

What’s even more interesting, two-thirds of sedan owners that returned to the market for a new vehicle bought an SUV or a crossover instead of a three-box car. Even so, the sedan is still a popular segment and is not facing the faith of vans and wagons classes.

“While loyalty in sedans has gone down, sedans aren’t going away,” Libby told Automotive News. “Sedans still play a significant part in the market, and that’s not going away anytime soon.”

Consumer Automotive Loyalty Rates by Body Style, 2012-2017       2012     2013     2014     2015     2016     April 2017 CYTD TOTAL SPORT UTILITY     52.9     53.7     57.0     60.9     63.4     66.2

INDUSTRY

   

47.6

   

48.1

   

49.0

   

50.5

   

51.6

   

52.6

PICKUPS     42.5     44.3     45.1     48.2     49.6     50.9 SEDAN     56.2     56.1     54.4     52.3     50.7     48.6 TOTAL VAN     29.0     29.9     29.4     31.9     33.6     31.8 HATCHBACK     27.2     27.6     26.3     25.8     25.2     27.1 COUPE     19.3     19     20.4     22     21.9     21.6 CONVERTIBLE     18.3     18.4     17.9     18.8     18.8     21

Source: IHS Markit

Note: 2017 represents January – April 2017 personal new vehicle registrations, the most recent data available.

More details are available at the press release section below.

Source: IHS Markit via Automotive News

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Consumer Loyalty to SUV/CUVs Highest Ever; Sedan Loyalty Continues to Drop, IHS Markit Says

More than two-thirds of Sport Utility Vehicle (SUV) and Crossover Utility Vehicle (CUV) owners in the U.S. who returned to market in the first four months of 2017 acquired another new SUV or CUV, according to new analysis from business information provider IHS Markit.

SUV/CUV loyalty has grown from under 53 percent in 2012 to more than 66 percent through April, and is 13 percentage points higher than the industry average of 52.6 percent, IHS Markit says. Pickup loyalty rates are also increasing, with nearly 51 percent of pickup owners acquiring another one during the first four months of the year. These two categories have grown in part due to low gas prices.

At the same time, sedan loyalty rates have softened, with rates declining 7.6 percentage points to 48.6 percent since 2012, when 56.2 percent of sedan owners acquired another sedan, according to IHS Markit analysis. If this trend continues through the rest of the year, this will mark the first year in which less than half of sedan households acquired another one when they returned to market. IHS Markit data indicate in the first four months of 2017, two-thirds of sedan owners defected to an SUV/CUV – representing nearly 300,000 transactions.

  Consumer Automotive Loyalty Rates by Body Style, 2012-2017       2012     2013     2014     2015     2016     April 2017 CYTD TOTAL SPORT UTILITY     52.9     53.7     57.0     60.9     63.4     66.2

INDUSTRY

   

47.6

   

48.1

   

49.0

   

50.5

   

51.6

   

52.6

PICKUPS     42.5     44.3     45.1     48.2     49.6     50.9 SEDAN     56.2     56.1     54.4     52.3     50.7     48.6 TOTAL VAN     29.0     29.9     29.4     31.9     33.6     31.8 HATCHBACK     27.2     27.6     26.3     25.8     25.2     27.1 COUPE     19.3     19     20.4     22     21.9     21.6 CONVERTIBLE     18.3     18.4     17.9     18.8     18.8     21

Source: IHS Markit

Note: 2017 represents January – April 2017 personal new vehicle registrations, the most recent data available.

 

The top three body styles with the highest loyalty account for more than 85 percent of all new light vehicle registrations in the U.S. during the first four months of 2017, IHS Markit says.

“The exceptionally high loyalty of SUV/CUV households is driven by continued proliferation of crossover models across a wide range of size, price and functionality (i.e., off-road vs. non-off road),” said Tom Libby, manager, automotive loyalty and industry analysis at IHS Markit. “In some cases this proliferation has resulted in two or even three models in the same segment from the same brand.”

IHS Markit loyalty data further indicate that those sedan households most vulnerable to defecting to another body style (such as SUV/CUV) are nomads — those households that have only owned one sedan; in contrast to those that have owned two or more consecutively, defined as loyalists or super loyalists by IHS Markit. Loyalists and super loyalists are more loyal to the body style and less vulnerable to defection.

“Marketing teams from brands with a competitive SUV/CUV portfolio would therefore be best served to target those households that have not been consistently sedan-oriented over the past several purchase cycles,” Libby said.

The complete analysis by IHS Markit covered U.S. new vehicle transactions from 2012-April 2017, including purchases and leases that took place between January 2012 and April of 2017 among owners who had acquired a new vehicle in the past ten years. The SUV/CUV body style as defined by the research includes SUV and CUV models collectively. In addition, the second vehicle may be an addition to the household fleet, not necessarily a replacement.

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