Ford Motor Company Leads Industry in Loyalty Rate

At 64%, Ford again commands the strongest loyalty rate in the industry, which is good news for investors.

Jun 27, 2014 at 3:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) 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. 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 is launching a slew of new vehicles this year to boost sales . Source: Ford Motor Company

Ford (NYSE:F) 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 (NYSE:TM), both with 57.8% loyalty rates. Fiat Chrysler Automobiles' (NASDAQOTH:FIATY) 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 (NYSE:GM) 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. 

Warren Buffett's worst auto-nightmare (Hint: It's not Tesla)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to invest in this megatrend. Click here to access our exclusive report on this stock.

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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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