Lexus (Premium) and Honda (Mass Market) Receive Brand Awards; Kia Receives Most Model Awards
The resale value a vehicle carries is consistently cited as one of the most important elements vehicle shoppers consider when purchasing a new vehicle. The J.D. Power 2023 ALG Residual Value Awards have increased importance in today’s market for both automakers and consumers, given the recent increases in the cost of new and used vehicles.
For a third consecutive year, Lexus receives the brand award for best premium brand. For a second consecutive year, Honda receives the brand award for best mass market brand. Kia receives the most model awards overall and is the most improved mass market brand year over year, moving up three places. Porsche is the most improved premium brand, moving up four places.
“This year’s achievement by Kia speaks volumes about how far the brand has come,” said Eric Lyman, vice president of ALG, the division of J.D. Power recognized as the industry benchmark of automotive residual value projections. “The marketplace is acknowledging that Kia has a very strong product lineup in terms of design, quality and residual values. Kia has become a force to be reckoned with.”
For model year 2023, 13 different brands receive awards in 29 segments, which is six fewer brand recipients than a year ago. The 2023 award process consisted of evaluating 291 models through analysis of used-vehicle performance, brand outlook and product competitiveness. Eligibility for a brand award requires a manufacturer to have model line entries in at least four different vehicle segments. To account for differences across trim levels, model averages are weighted based on percentage share relative to the entire model line. For a segment to qualify for an award, at least four different brands must be included. This year, the large car segment has only three model lines, so it does not qualify to have a segment recipient.
Model-Level Residual Value Awards
Kia receives the most model-level awards, with five. Honda and Toyota each receive four model-level awards. Model award recipients include:
- Kia: K5, Rio, Sportage, Soul and Telluride
- Honda: Civic, Passport, HR-V and Odyssey
- Toyota: GR Supra, 4Runner, Tacoma and Tundra
- Land Rover: Range Rover Velar, Discovery and Range Rover Evoque
- Chevrolet: Bolt EV and Silverado 2500 HD
- Lexus: IS and LX
- Mercedes-Benz: AMG GT 4-Door and Metris
- Porsche: 911 and Macan
- Acura: Integra
- Audi: A6 Allroad
- GMC: HUMMER EV Pickup
- Jeep: Wagoneer
- Subaru: WRX
The U.S. ALG Residual Value Awards are the automotive industry standard in recognizing vehicle models projected to hold the highest percentage of their manufacturer’s suggested retail price following a three-year period of ownership. This value retention is a key variable in the lease cost of a vehicle, underscoring an automaker’s success in the areas of long-term quality and design, as well as the overall desirability of automotive brands and their models.
Numerous variables affect the actual residual value of a vehicle over a multi-year lease term. Examples include mileage, quality/reliability, options and feature sets, weather and macroeconomic environment. Since these factors need to be taken into account in order to accurately forecast residual values, the more granularity and greater the understanding of the effect of each variable, the better equipped manufacturers and lenders are to be able to maximize profitability. The combination of J.D. Power insights and data with the deep experience of ALG in residual values allows for even more accurate end-of-lease forecasting capabilities.