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Customer loyalty extends beyond just the brand name. Global consumers are loyal to products for a number of reasons, from color, form factor, and even specific features. In the case of automobiles, for example, a recent report released by IHS Automotive revealed that customers are now demonstrating a record amount of loyalty for specific models, specifically SUVs (sports utility vehicles) and CUVs (crossover utility vehicles).
According to the data, almost two-thirds (63%) of SUV/CUV owners who were in the market for a new vehicle in Q1 2016 purchased another SUV or CUV. This is the latest observation of a growing trend in automotive buying: SUVs and CUVs now comprise 41.8% of personal new vehicle registrations, up from 35.2% just five years ago.
The report was generated from an analysis of 1.9 million return to market events, and its results can be attributed to several factors at play within the industry. As gas prices maintain a relatively low price, car buyers are no longer as restricted by fuel efficiency, resulting in a relative SUV boom.
This boom led to additional buying options from manufacturers within the class, further compounding the popularity of these larger vehicles.
“We continue to see the SUV/CUV segment reaching record registration volumes in the U.S. market,” said Tom Libby, manager, loyalty and industry analysis with IHS Automotive. “New designs and OEM marketing initiatives focused on capturing repeat buyers are helping this segment continue its substantial growth.”
Beyond the basic classifications, IHS analyzed 32 segments representing automotive body types. Among these, the positive trend for SUVs and CUVs is even more apparent: the three segments with the largest increase to loyalty were CUVs, and the eight most loyal segments all belong to the SUV/CUV class. The leading segment was the luxury full-size SUV, with 70.3% of owners purchasing another SUV/CUV for their next vehicle.
While low fuel prices have contributed to the increased volume (and staying power) of these larger vehicles, analysts expect the trend to hold steady even after prices increase.
“The high loyalty rates for SUVs and CUVs lend credence to the current shift from passenger cars to utility vehicles,” said Christopher Hopson, manager, North America light vehicle sales forecast at IHS Automotive. “We expect this shift to be sustained, even when fuel prices are expected to rise back above USD $3.00/gallon by 2020.”
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