Ford Motor Company Leads Industry in Loyalty Rate
The Dow Jones Industrial Average was trading 48 points lower, or 0.3%, by midafternoon despite some positive news from the American consumer. According to the Reuters/University of Michigan survey, consumer sentiment increased to 82.5 in June. That was higher than a previous reading this month of 81.2 and more than economists' expectation of 81.9.
A more optimistic consumer is good news for the economy, and could mean Tuesday's sales reports from automakers will be better than expected. Edmunds.com expects overall industry sales in the U.S. to decline by roughly 3%; however, when you adjust for the fewer selling days this month compared to June 2013, sales are expected to actually check in 5%-6% higher.
With that in mind, here are some automakers making headlines in the markets today.
Ford has the highest loyalty rate in the industry, according to a newly released study by IHS Automotive. The study determines loyalty when a household owning a new vehicle returns to the market and purchases or leases another new vehicle of the same make. IHS Automotive's study analyzed more than 1.8 million new vehicle transactions during the first quarter of 2014.
Ford had the highest loyalty rate at 64%, followed by Mercedes-Benz and Toyota , both with 57.8% loyalty rates. Fiat Chrysler Automobiles' Jeep brand saw one of the biggest improvements with a 8.1 percentage point increase over the study's time frame.
Loyalty is extremely important in the competitive automotive industry when it comes to gaining market share. It's even more important when you consider that retaining a customer is much cheaper than taking one from a competitor.
General Motors didn't earn a top loyalty rate, but AutoPacific's recent 2014 Vehicle Satisfaction awards gave top honors to four Chevrolet vehicles -- the most awards won by any single manufacturer in this year's awards.
Chevrolet's Impala, Sonic, Corvette, and Camaro each ranked No. 1 in their respective segments for the awards that measure customer satisfaction in 50 different categories, according to AutoPacific.
"Today's Chevrolet car lineup is the best in the brand's history with the design, performance, technology and safety that consumers want and expect," said Brian Sweeney, U.S. vice president, Chevrolet, in a press release. "Everything we do at Chevrolet is focused on offering the best possible experience for the consumer. These four AutoPacific Vehicle Satisfaction Awards prove we are delivering on that promise."
Investors would be wise to keep an eye on automotive sales due out Tuesday, one day after the end of the second quarter. Through May, sales of light vehicles in the U.S. were up roughly 5%. Thus far, new-vehicle sales in the second quarter have been strong, making up for a slow start to the beginning of 2014. This could aid automakers in beating earnings expectations when reporting next month.
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The article Ford Motor Company Leads Industry in Loyalty Rate originally appeared on Fool.com.Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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