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For Car Buyers, the Brand Romance Is Gone

October 21, 2009
 

For Car Buyers, the Brand Romance Is Gone

DETROIT — To sell a car in the 1980s, dealers had to do little more than open their doors, and loyal buyers would show up to trade in their Chevrolet for a new Chevrolet, or their Toyota for another Toyota.

Nearly four in five Americans were repeat buyers back then, staunchly faithful to brands that they knew, trusted and were part of their self-image. The allegiance often continued through generations of families, like party affiliations in politics.

Now, partly as a result of increasingly fickle consumer tastes and the industry turmoil in Detroit, that hard-won loyalty is largely gone.

So far this year, only about 20 percent of car shoppers stayed with the same brand when they purchased a new vehicle, according to a study by the Oregon-based firm CNW Marketing Research.

As a result, the industry is seeing the kind of churn it hasn’t witnessed since Japanese manufacturers began making inroads in the American market more than 30 years ago.

“The days when people bought a Toyota car or a General Motors product for 25 years are over,” said Art Spinella, CNW’s president. “There really isn’t any brand loyalty any more.”

Chris Allen is a case in point. Mr. Allen, 24, grew up in a suburb north of Detroit. His father works for an auto supplier, and his family’s garage was always full of G.M. products.

“We had Saturns, Oldsmobiles, Buicks and a string of Chevys,” said Mr. Allen. “My first two vehicles were hand-me-downs — a GMC Sonoma and a Pontiac Grand Am.”

After graduating from Michigan State University, Mr. Allen moved to Los Angeles, where he works for a market research firm. And when he bought his first car, he chose a Volkswagen GTI.

“If G.M. produced a vehicle I wanted, it would have been at the top of my list,” he said. “But they don’t.”

Just five years ago, Chevrolet and Ford sat comfortably atop the United States market, each with more than a 16 percent share. Chrysler had three brands — Chrysler, Dodge and Jeep — in the top 10.

Today, the Toyota brand leads the pack with slightly more than 14 percent, followed by Ford, Chevrolet, and the Honda and Nissan brands. The Chrysler brand and G.M.’s soon-to-be-discontinued Pontiac brand have fallen out of the Top 10 — replaced by two South Korean brands, Hyundai and Kia.

Each percentage-point movement represents tens of thousands of sales, and underscores how car buyers, armed with reams of data from the Internet, are comparison shopping as never before. And because most cars have become more reliable, choice becomes more a matter of taste.

“Brand loyalty has shrunk because of widespread improvements in the products,” said James Farley, Ford Motor Company’s head of marketing. “The ‘trust factor’ is more or less the same for most cars.”

This shift has enormous implications for the way automakers advertise.

In the glory days of Detroit’s Big Three, the companies and their advertising agencies invested heavily to market slogans that covered a wide range of products. Ad campaigns like Chevrolet’s “Heartbeat of America” and “Have You Driven a Ford Lately?” were used to market everything from small cars to big pickup trucks. Even Toyota followed suit with broad messages — “I Love What You Do for Me” — that covered everything it sold.

Now, one size no longer fits all. Toyota, for example, found that the rock-solid quality that made its Camry sedan the top-selling car in America did not lure many buyers to its full-size Tundra pickup.

“This is not the age anymore of meaningless slogans,” said Jack Trout, president of a consulting firm, Trout & Partners, in Old Greenwich, Conn. “What you’re after is differentiation of your products.”

Hyundai has carved out a 4 percent share of the American. market because its vehicles are less expensive than Toyota’s but are perceived as just as reliable, said Mr. Spinella of CNW Marketing Research. The company differentiated itself further this year when it offered to take back cars if the owners lost their jobs and could not afford to make payments.

“Today, people are very focused on value,” said Jeremy Anwyl, president of the car-research Web site Edmunds.com in Santa Monica, Calif. “Hyundai took a unique position to address that.”

Ford tried to excite consumers with ads a few years ago that extolled its heritage. But the current marketing campaign for its fuel-efficient Fusion sedan does not even mention the Ford name until the end of the ad.

The lesson Ford learned, Mr. Farley said, is that today’s car buyer has little use for nostalgia.

“I can’t tell you how many car clubs I have been to where they own old Mustangs and vintage T-Birds, but they drive Camrys,” he said.

David Leonhardt, whose Economic Scene column normally appears on this page, is on assignment.

 

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