Car Buyers Show New Declines in Brand Loyalty, Hurting US Auto Manufacturers, including GM (NYSE: GRM), Ford (NYSE: F) and Chrysler.

November 5, 2009 by admin

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A new report from CNW Research indicates that car buyers have all bust lost any sense of brand loyalty they once had, dragging down profits of General Motors (NSE: GRM), Ford (NYSE: F) and Chrysler.

Historically, it was generally a given that new car buyers would likely buy the brand that they are already driving, but that’s changed in the last decade. Now only one in five shoppers during the last 12 months have replaced a vehicle with the same brand they previously had sitting in their driveway.

With an unprecedented amount of automobile research and information that’s available, consumers now have the ability to make better car buying decisions based on a particular make and model of a vehicle rather than a generally perceived level of quality and value for a given automobile manufacturer.

Another contributing factor is that almost all car buyers are now only looking for the best deal I in terms of quality and price, which has been very troublesome for the Detroit automobile makers.

Some Detroit newspapers have said that manufacturers are blaming their ad agencies and firing them for the lack of brand loyalty, but many would a argue that the real problem is that the market is far too competitive and vehicles are too good for any one brand to have a distinct advantage over another just based on the brand name.

Especially since the recession, consumers are looking for deals and value in everything they buy, and that’s bad news for dealers depending on consumers’ brand loyalty to come back.

Remember when purchasing a car, keep your emotions at bay and do your homework. Research multiple models from different manufacturers to determine the best deal you can get.


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