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Brand Loyalty is Declining for Most Luxury Automakers

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Automakers Brand Loyalty

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Brand Loyalty is Declining for Most Luxury Automakers

New research conducted by S&P Global Mobility has found that brand loyalty—measured as the percentage of buyers that go back to the same brand for their next vehicle—is falling across the luxury segment.

In this infographic, we’ve visualized the results of this research, which spans from January 2020 to April 2022.

Brand Loyalty Losers

The following brands have all experienced a drop in brand loyalty over the time period.

For additional context, we’ve also included each brand’s score in the J.D. Power 2022 Initial Quality Study. This is measured based on the number of problems experienced per 100 vehicles (PP100) in the first 90 days of ownership.

BrandPercentage Point Change
in Brand Loyalty
PP100
🇬🇧 Land Rover-9.2193
🇩🇪 Porsche-8.5200
🇺🇸 Lincoln-7.9167
🇩🇪 Audi-7.3239
🇩🇪 Mercedes-Benz-7.0189
🇮🇹 Alfa Romeo-6.6211
🇺🇸 Cadillac-6.4163
🇸🇪 Volvo-5.3256
🇯🇵 Infiniti-5.2204
🇬🇧 Jaguar-5.1210
🇯🇵 Lexus-4.8157
Luxury average-4.5199
🇯🇵 Acura-2.7192
🇩🇪 BMW-2.3165

Land Rover experienced the biggest drop in loyalty, despite a better than average PP100 rating. One potential reason is timing⁠—the brand’s premier model, the Range Rover, has been in its fourth generation since 2012. The SUV has become relatively dated, though a new fifth generation was recently revealed for the 2022 model year.

Two Volkswagen Group brands, Audi and Porsche, also fared poorly in terms of loyalty. This is somewhat surprising, as both brands offer a portfolio of both gasoline and electric models. Many competitors, such as Acura, Lexus, and Maserati, have yet to release an EV.

Brand Loyalty Winners

Three brands have managed to buck the trend, as shown below.

BrandPercentage Point Change
in Brand Loyalty
PP100
Luxury average-4.5199
🇺🇸 Tesla+4.0226
🇮🇹 Maserati+4.3255
🇰🇷 Genesis+8.5156

We can draw parallels between Tesla and Apple, in that both have incredibly loyal followers.

For instance, between March 2021 to April 2022, 62% of buyers/households who returned to market and previously owned a Model 3 purchased a new Tesla. That’s an impressive statistic, especially when we consider Tesla’s history of build quality issues.

Maserati appears to be in the same boat. The Italian automaker has strengthened its brand loyalty by 4.3 percentage points, despite having the luxury segment’s worst PP100. Perhaps build quality matters less than we think.

Another Factor to Consider

Ongoing supply chain issues could also be contributing to wide-spread declines in loyalty. Rather than waiting several months (or in the case of EVs, years), buyers may switch to a different brand that has cars in stock.

We are still monitoring it week to week, but up to now basically worldwide, we had no issues running production.
– Joerg Burzer, Mercedes-Benz

Many automakers have reported that their supply issues are diminishing, though new economic challenges have risen. For example, surging inflation has pushed the price of a new car to record highs. Combined with rising interest rates (cost of borrowing), this could negatively impact the demand for new cars.

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Visualized: EV Market Share in the U.S.

Although sales have been climbing, EV market share in the U.S. remains low as a percentage of all vehicles registered on the road.

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Visualized: EV Market Share in the U.S.

Electric vehicles are a fast growing segment in the U.S., but how much market share have they taken from traditional gasoline cars?

According to recent data from the U.S. Department of Energy, not much.

In this graphic, we visualize light-duty vehicle registrations in 2022, broken out by fuel type. It shows that out of the 281 million cars registered nationally, electric (EV) and plug-in hybrid (PHEV) vehicles represented only 1.2%.

Breaking Down the Data

An important distinction to make is that registrations are not the same as sales.

While sales represent the number of new cars sold within a timeframe, registrations reflect the number of cars that are registered with a state’s Department of Motor Vehicles (DMV).

As a result, registrations include both new cars and used cars that have changed ownership. This provides a more comprehensive measure of what cars are on the road.

The following table shows the data we used to create this graphic.

Fuel TypeRegistrations in 2022Share of Total
Gasoline275,728,30098.0%
EV and PHEV3,454,7001.2%
Alternative Fuels2,573,2000.9%

It’s worth noting that the gasoline category also includes diesel, E85 flex fuel, and traditional hybrid vehicles, while alternative fuels includes biodiesel, natural gas, propane, and hydrogen.

Vehicles that the Department of Energy categorized as “unknown fuel type” were excluded.

EV Market Share on the Rise

EV adoption in the U.S. has been relatively sluggish compared to the EU and China, though this is beginning to change as automakers roll out more electric SUVs and trucks.

According to Cox Automotive, U.S. EV sales (full battery electric) in Q2 2023 set a new record of 300,000 units, marking a 48% increase from Q2 2022.

For additional context, a total of 800,000 EVs were sold in the U.S. throughout the entire year of 2022, in addition to 190,000 PHEVs.

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