Lexus and Honda are receiving the top brand awards in the J.D. Power 2024 U.S. ALG Residual Value Awards. 2024 marks Lexus' fourth consecutive brand award for best premium brand and Honda's third consecutive win as best mass market brand. Three marques—Honda, Lexus and Toyota—were each recognized with four model segment winners.
J.D. Power says according to the 2024 awards, as new- and used-vehicle prices continue to rise, the resale (or residual) value of those vehicles has never been more important to consumers. For model year 2024, 15 different brands received awards in 28 segments, which is two more brand recipients than a year ago.
“The continued strength of Lexus and Honda underscores an attention to detail and a unique strategy in terms of product planning and management,” said Kristen Lanzavecchia, director of customer success at ALG, the division of J.D. Power recognized as the industry benchmark of automotive residual value projections. “Overall, these brands took a measured approach in their freshening of products, trim levels and powertrains, resulting in higher residual performance and better long-term value for their customers.”
J.D. Power says the more balanced strategy specific to trim levels by Lexus and Honda is underpinned by entry-level vehicles that offered heightened product value. J.D. Power also notes that Honda and Lexus were more conservative in their offerings of fully electric vehicles. Researchers say the brand's provided a wider range of options, including traditional gas-powered, hybrid and plug-in hybrid variants.
In terms of models winners, this year's awards process consisted of evaluating 293 models through analysis of used-vehicle performance, brand outlook and product competitiveness. J.D. Power says 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, J.D. Power says model averages are sales weighted based on percentage share relative to the entire model line. There must be at least four brands in a segment to quality for an award. Only three model lines were represented in the car category, so no award was given.
Model-Level Residual Value Awards
Honda, Lexus and Toyota each receive four model-level awards. Model award recipients include:
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.
Photo Credit: Lexus.