J.D. Power recently released a study describing “new vehicle buyer retention rate” by brand. To put that in English, J.D. Power figured out how likely someone who bought a new [blank] is likely to buy another new [blank]. Here’s a nice graph that breaks it down:

J.D. Power’s “Owner Retention Rate by Brand” study results are hardly conclusive (or reasonable).

You’ll have to click on the picture to see all the brands with below-average buyer retention. Jaguar, with only 26.2%, is the lowest.

Toyota and Lexus placed highly, with 63.2% and 60.4% retention respectively. In other words, about 60% of the people buying new Toyota and Lexus vehicles currently own another Toyota or Lexus product. Honda finished just slightly above Toyota at 64.7% retention.

The problem, of course, is that retention has as much to do with brand selection as it does with brand satisfaction. Only brands that offer “one of everything” can get good results in a study like this.

First, a note about methodology: this study didn’t predict the future. JD Power asked people who just bought a new car if they had another car of the same brand in the garage. If you bought a new Toyota 10 years ago, and you’re buying another new Toyota today, you’re considered a “retained owner.”

To our point about selection vs. satisfaction, let’s talk about the luxury car market. Here, according to the study, the big winners are Lexus, BMW, and Mercedes. Of course they’re the only luxury brands with a near complete line-up. For example, if you’re a huge fan of Jaguar and you need an SUV, you’re going to have to look somewhere else. Porsche fans don’t have much in the way of choices when it comes to anything that’s not a sports car. Most luxury brands offer fewer than 6 models – of course they’re going to have low retention! The fact is that Lexus, BMW, and Mercedes come closest to offering “one of everything,” and because of that fact they enjoy higher than average retention. Big surprise.

Because selection is so important, we have to discount the results of this study even further. Exclude any brand that doesn’t offer a complete line-up – Hummer, SAAB, and Mini are obvious, but mainstream brands like Mercury, Pontiac, Chrysler, and Subaru don’t offer complete line-ups either. You can scratch every brand on the list but five…

Toyota, Honda, Ford, Chevy, and Nissan all offer a complete (or nearly complete) line-up, meaning they can be compared somewhat fairly. Statistically, Nissan, Ford, and Chevy are in a dead heat – there’s no clear winner among the three. Honda and Toyota seem to be a step above the rest, but they have an advantage that we haven’t mentioned yet…cheap small cars. First time buyers usually opt for cheap small cars (they’re cheap, after all), and anyone with a cheap small car in the garage they bought years ago is considered a “retained owner.” Since Honda has done a phenomenal job of selling cheap small cars during the last decade, they take first prize in this “study.” Toyota, no slouch in small car sales during the last decade, comes in second. Ford, Chevy, and Nissan, who haven’t sold too many cheap small cars in the last 5-10 years (they were busy selling profitable trucks and SUVs, which haven’t been too popular lately) are going to come in behind.

Sure, sure, it’s true that Honda and Toyota do a good job of making great cars that people love, but we already knew that. This study didn’t tell us much – at best, the results could be compared for two very similar brands (say Mercury and Chrysler), but even then the data is hard to swallow. While we like J.D. Power, we think it’s important to remember that a lot of the work they do should be met with a heavy degree of skepticism.

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