All Hail Hyundai — New King of Brand Loyalty

Apparently, to own a Hyundai (PINK:HYMTF) is to love a Hyundai. The affection is so deep now that the privately held South Korean automaker earned the top spot for brand loyalty in a recent Kelly Blue Book consumer survey, overtaking Honda Motor Co. (NYSE:HMC) and Toyota (NYSE:TM) brands in the second quarter of 2011, which have dominated the category for years.

During the period, Hyundai’s brand loyalty reached 52.3%. Its new car sales in the U.S. increased 26% during the first half of 2011, compared with the same period last year.  Honda’s brand loyalty, meanwhile, was at 49.7% and Toyota was 47.7%, and sales fell for both automakers, partly because of supply issues stemming for the tsunami in Japan this spring.

It’s an impressive accomplishment for Hyundai, as it wasn’t that long ago that Americans once considered Hyundai a producer of some of the most unreliable cars on the market. But Hyundai’s vehicles – particularly the redesigned Elantra, Sonata and Santa Fe – have proven to drivers that no longer is the case. Those models are prime examples of how Hyundai has addressed both reliability and comfort in its base models, giving drivers a roomier ride, fantastic mpg and perks such as voice sync technology and satellite radio.

There’s no denying consumers love Honda and its quality under the hood. However, creature comforts matter to U.S. drivers, and Honda’s base models lack the basic frills that drivers want. Until acceleration problems damaged Toyota’s reputation for reliability, leading it to offer freebies to new car owners, the automaker also was guilty of forcing customers to pay extra for perks standard in other brands.

No one knows whether Hyundai will be able to hold onto its top ranking in customer brand loyalty when Japan’s auto factories are once again able to operate at full capacity and the economy improves. But a more curious question for many U.S. drivers should be why American automakers Ford Motor Co. (NYSE:F) and General Motors Co. (NYSE:GM) didn’t make the top three for brand loyalty, and why only one – Ford – made the top five.

Cynthia Wilson did not own any of the aforementioned stocks as of this writing.


Article printed from InvestorPlace Media, https://investorplace.com/2011/07/hyundai-hymtf-honda-toyota/.

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