Building Brand Loyalty in the Automotive Industry

by Bryanna Gallagher | Other

Building Brand Loyalty in the Automotive Industry


The automotive industry is in constant flux. New technologies have exploded onto the scene with electric cars, autonomous vehicles, and assistive technologies. In addition, consumer preferences are tied heavily to economic growth and gas prices which can change rapidly. How can you make sure that your brand keeps up and stands out in this ever-changing market? How do you create or continue customer loyalty among your brand with so many options on the market? We are here to bring you the tips for building brand loyalty in the automotive industry.

Current Market Trends

Marklines reported 17.2 million new passenger vehicles were sold in 2018, this indicated growth from previous years. However, not all passenger vehicles are created equal, According to a comprehensive study conducted by Edmunds, a decade ago sedans made up 50% of the market while today they only account for 36% of new purchases.

Consumers’ tastes have dramatically shifted in favor or Trucks and SUVs. This can be attributed to lower gas prices, economic growth, and more environmentally friendly SUV options. Edmunds reports that 75% of SUV owners traded in for an SUV and 74% of truck owners stranded for trucks. These shifts in preferences have sent many brands scrambling to abandon their traditional sedan options and bring more SUV and truck options to market.

This has certainly lead to a loss in loyalty to those brands that have not been able to make the transition for their consumers’ preferences. It important however to note other mitigating factors in car brand loyalty such as safety, access to maintenance, and warranties. These factors must be accounted for in order to have a successful brand. The product must meet the quality of the brand.

The Luxury Auto Segment

In general the luxury car market tends to experience less loyalty than mainstream market brands. Lexus dominates the luxury market, yet only has a 51% loyalty rate compared to top mainstream brand Toyota with 63% according to Edmunds. Several luxury car owners have made the switch to mainstream brands, which could be due to the wider selection of SUVs and trucks among those brands.

However, it is important to note that family of brands loyalty remains strong.
Mainstream brands such as Kia and Hyundai have begun to introduce “premium” versions of their automobiles to try to cut into the luxury market. It is important for brands to identify the needs their competitors fill and match them in order to keep loyal costumers from defecting to other brands to suit their needs.

“Respondents were loyal to auto manufacturers (or family of brands), with 81% owning multiple vehicles from the same manufacturer. For instance, we spoke to Lexus owners who had previously owned a Toyota, as well as Acura owners who had owned a Honda in the past.” -Jumpstart Automotive Media

Top Contenders for Automotive Brand Loyalty

Subaru: Give Love, Get LoveSubaru: Give Love, Get Love

Subaru has become somewhat of a superstar in the car market boasting one of the highest loyalty growth rates in the past decade moving from 45% in 2007 to 61% in 2017 according to Edmunds. This can be attributed to Subaru’s loyalty campaign strategies. In 2008 Subaru launched it’s Love campaign. The Love Campaign is a comprehensive campaign that puts a socially responsible spin on loyalty. Subaru pledges to love pets, the earth, to care, to help, and learning.

Through the Love campaign Subaru engages in various service projects and makes donations to help the advancement of each love area. Subaru periodically runs specials that allow purchasers to choose a charitable cause and Subaru will donate $250 to that cause. Dear Subaru is another program they utilize, it is an ode to brand loyalty. Dear Subaru is a collection of letters from real fans highlighting special moments or reasons why they love Subaru.

These letters have even been used as the basis for some of Subaru’s most beloved commercials. Subaru has created strong emotionally based commercials that demonstrate the longevity of Subaru autos and usually feature man’s best friend. As Forbes’ Jaysen DeMers, notes “Brand loyalists are driven by emotions, at least to some degree, when going back to their favorite companies”.

Honda: Sharing is Caring

Honda regularly comes in near the top for customer loyalty. What is especially interesting is that Honda primarily offers 4-door sedans and not many truck or SUV options, but due to it’s fierce brand loyalty it is able to dominate the sedan market. Honda is giving a $750 discount on new Accord purchases for loyal customers.

Here a loyal customer is defined as any owners of a 2009 or newer Honda, all models included. As an extra bonus this deal can be shared within the household and does not require a trade-in. This gives Honda the unique opportunity to double its presence in many households.

GM: A Traditional Brand’s Approach

GM My Rewards

GM has been named the champion of IHS Markit’s Automotive Loyalty Awards the last three years. GM is unique because there are multiple brands under the GM umbrella which allow consumers more choices within the same family of vehicles. GM launched My Rewards.

This a simple points based program the more products and services you buy from GM the more points you earn. The points can then be redeemed towards future purchases and services. Ford is following suit and recently announced that it will be launching it’s own rewards program.

The Electric Car Niche

According to Experian, Electrical Vehicle (EV) owners tend to demonstrate a very strong sense of brand loyalty. It was found that 62% of EV owners remain EV costumers on their next purchase. A clear campion of the EV movement is newcomer Tesla. Tesla boasts a 80.5% loyalty rate and a Conquest/Defection ratio of 13.77 to 1. Tesla has found a unique position as a luxury tech brand with an environmental focus. Tesla’s ability to corner this niche market contributes to it’s success with brand loyalty.

How to Build Brand Loyalty in Automotive

It is clear that consumer brand preferences in the automotive industry are ever changing amidst economic, environmental, and emotional preferences. It is important to build a brand that is flexible and caters to these market changes while still keeping safety and quality product in mind. Are you looking to increase loyalty for your automotive brand? Call us today and let the professionals at Annex Cloud help!

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