Tesla has continued to dominate the auto industry’s brand loyalty rate in the first half of the year, according to an S&P Global Mobility analysis of new vehicle registration data.
The industry’s brand loyalty rate was 50.6 percent – identical to the same period in 2022 – despite a 7 percent increase in return-to-market volume among consumers. The overall brand loyalty rate has stagnated, but S&P Global Mobility says that’s good news after sharp decreases in loyalty due to pandemic-related inventory shortages.
“The last few years have shown that if a consumer has a need for a certain type of vehicle, they are not going to wait for their preferred brand to supply it,” said Tom Libby, associate director for loyalty solutions and industry analysis at S&P Global Mobility.
“This has opened the door for more brands to capture market share from traditional leaders. Years of investment in quality and technology among the industry has evened the playing field, and we are seeing some of the smaller brands take advantage of that.”
Among individual brands, Tesla was once again the leader in brand loyalty with a rate of 68.4 percent for the first half of 2023. This means that just 31.6 percent of owners leave Tesla to buy a new vehicle.
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All vehicles in Tesla’s lineup have high retention rates, but the Model 3 is the clear winner with more than 74 percent of its returning consumers remaining loyal to the brand. The most popular choice of vehicle for previous owners of the Model 3 is the Model Y.
“Tesla has proven it has a strong connection with its customers, despite increasing competition in the BEV market. Calculated price drops and timely incentive offerings have helped to boost interest and keep the brand’s positive momentum going,” said Vince Palomarez, associate director, Loyalty product management at S&P Global Mobility.
General Motors was ahead of last year’s pace in loyalty to manufacturer, leading all multi-brand manufacturers, while brand loyalty rates for Buick and Land Rover rose by more than 10 percentage points; the two brands were among the highest year-over-year gainers.
Leaders in model loyalty included the Ford F-Series pickup and Lincoln Nautilus crossover, S&P Global Mobility said.
Luxury brands contributed to halting brand loyalty declines in the first half of the year, seeing a 2.7 percentage point increase year-over-year. The mainstream sector saw brand loyalty decline by 0.4 percentage points over the same period.
