Beyond brand loyalty: Tracking the modern auto buyer

A clear hierarchy emerges when looking at segment loyalty. The overall industry segment loyalty rate sits at 34.7%, meaning that only about one in three buyers sticks with the same vehicle segment when they purchase a new vehicle.

However, this average masks some significant differences between the market leaders and the rest of the pack.

• The Compact Utility segment is the loyalty champion of this group, retaining an impressive 45.4% of its owners, more than 10 percentage points higher than the total market.
• Full-Size Half-Ton Pickups (38.7%) and Upper Mid-Size Utilities (38.3%) also demonstrate strong retention, holding onto their customer base at rates above the average.

In contrast, other segments underperform the average and struggle to keep pace.

• The Subcompact Plus Utility segment, with a loyalty rate of 32.5%, falls below the market average. This underperformance is notable as it also represents the largest decline among the focus segments, down 3.7 percentage points year-over-year (YOY).
• All other segments combined post the lowest loyalty at just 29.3%, creating potential opportunity for conquest-focused brands.

This data paints a picture of a market divided: a top tier of highly desirable utility and pickup segments that successfully keep their buyers, and a lower tier that is losing a larger share of its owners to competitive segments. 

No segment can survive on loyalty alone; they need to conquest buyers from competitors. The data shows a powerful, cyclical relationship between the utility segments.

• Compact Utility vehicles pull buyers from a diverse range of segments, led by those downsizing from Upper Mid-Size Utilities (16.4%) and those upsizing from Subcompact Plus Utilities (12.9%) and compact/mid-size cars (21.6% combined).
• Full-Size Half-Ton Pickups are primarily fed by owners of utilities and mid-size pickups with Upper Mid-Size Utilities (21.2%) and Compact Utilities (17.2%) being the top two sources.
• Upper Mid-Size Utilities get their biggest boost from former Compact Utility owners (26.4%) looking for more space.
• Subcompact Plus Utilities are overwhelmingly fed by people moving from the Compact Utility segment (27.1%), suggesting a move driven by budget, a change in needs, or a household adding a smaller second vehicle. 

Looking at where defecting owners go confirms these trends. The path between utility segments is a two-way street.

• Owners leaving a Compact Utility are most likely to move up to an Upper Mid-Size Utility (20.8%).
• Conversely, the top destination for those leaving an Upper Mid-Size Utility is a Compact Utility (23.6%).
• The clearest "graduation" path in the market is seen with Subcompact Plus Utility owners, where a massive 36% of those who defect move directly into a Compact Utility.
• For Full-Size Pickup owners who switch, the destinations are now almost evenly split between Compact Utilities (18.3%) and Upper Mid-Size Utilities (18.0%), closely followed by ¾ and 1-ton pickups, and more utilities.

To truly predict a segment's future health, we must connect conquest rates with return-to-market (RTM) projections. For example, we know that Compact Cars are a key source of buyers for Compact Utilities, accounting for 11.4% of their conquests. But RTM forecasts show that the pool of Compact Car owners returning to the market in 2026 is projected to shrink by 9% vs. 2025.

This creates a critical question: Can the Compact Utility segment increase its conquest rate from Compact Car owners enough to offset the shrinking pool of available buyers? Or will this create a net loss of potential customers, forcing the segment to find growth elsewhere?

Analyzing the future RTM volume of these key feeder segments is the next step in forecasting the future of a segment either positioned for growth or facing a near-future headwind.

The battle for market share is nothing new, and the changing landscape of segments adds yet another challenge. This is illustrated by the Subcompact Plus Utility segment, which saw the steepest decline in loyalty this year of this group, showing how prone segments can be to customer defection.

Another big story is automotive consumer trends, including the cyclical flow of customers between the various utility segments, with households constantly moving up or down in size as their needs and budgets change.

The winning segments of the future will be those that not only retain their base but also successfully poach customers from feeder segments, especially those with growing RTM volumes.