Hyundai Motor's customer retention rate in the U.S. remains lower than the industry average. The rate stood at 47 percent, 1 percentage point below the average and 11th place among 36 brands, according to the 2009 Customer Retention Study by market researcher J.D. Power and Associates.

The 47 percent retention rate means that out of 100 customers who bought a new Hyundai vehicle, 47 would buy another one next time.

Hyundai's ranking moved up two notches from last year, but its rate this year is similar to the 46.7 percent of last year. Kia Motors' retention rate was even lower at 37 percent, ranking in the bottom group.

The fact that Hyundai-Kia Automotive Group's retention rate is far lower than its sales growth rate suggests that Hyundai's skyrocketing sales in the U.S. are not due to improved customer loyalty, but rather to aggressive marketing and alluring incentives based on relative price competitiveness resulting from the weak won.

Hyundai-Kia has set aggressive sales targets for next year for the U.S. market. To meet the targets, it has to sell 5.3 million to 5.4 million units, 700,000 to 800,000 more than this year's record-high performance. But if it resorts to cutthroat incentives or fleet sales to car rental companies to increase sales, the resale value of its vehicles will plummet and its new models will be undervalued, making it difficult to raise the retention rate.

Customer loyalty to the Korean automaker is also not very high in the Chinese market, where it plans to sell one million units next year. According to a recent survey by a local market researcher, Chinese consumers view Hyundai-Kia far below German and Japanese brands, and on par with or even slightly below Chinese ones.

Japanese cars ranked high in most categories of the J.D. Power survey, with Honda topping the list for mid-size cars. Despite sluggish sales in the U.S. this year, Honda did not turn to cash discounts or fleet sales because it views maintaining brand value as more important than improving short-term sales.