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
Longview

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. 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.

Images

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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers