Industry brand loyalty rates trended upward in the first half of
2024 following several years of flat or declining values, according
to a new S&P Global Mobility analysis of new vehicle
registration data through the first half of the year.
The industry's brand loyalty rate through June stands at 52.5%,
reflecting a 1.9 percentage-point improvement over the same period
in 2023, marking the first year-over-year increase since 2020. The
year-over-year increase in loyalty is a positive sign for the
industry after several years of lower loyalty levels due to
inventory shortages and post-pandemic recovery.
More than half of all brands in the industry saw a
year-over-year increase of 1 percentage point or better. This group
included both mainstream and luxury brands, which saw increases of
1.9 and 1.4 percentage points, respectively. Growing inventory
levels and a strong pipeline of return-to- market households were
the primary factors in loyalty gains for the first half of
2024.
“Last year we saw a big jump in the number of households
returning to market for a new vehicle, but the inventory was
lacking,” said
Vince Palomarez, associate director, loyalty product management
at S&P Global Mobility. “This year, return-to-market volume
remains consistent; however, inventory levels are up more than 40%,
so households have more opportunity to remain loyal to their
previous brand.”
Conquest trends adversely affected
The increase in brand loyalty adversely affected conquest
volume, as both sectors experienced year-over-year declines in the
first half compared to the same period last year. The luxury
brands, which experienced an 18% year-over-year increase for the
first half of 2023, faced the largest decline, dropping 6.4% in the
first half of 2024. Meanwhile, mainstream brands, while still
declining year over year, saw conquest levels fall 1% vs. the first
half of 2023.
“The positive jump in loyalty came at the expense of conquests,”
said
Tom Libby, associate director for loyalty solutions and
industry analysis at S&P Global Mobility. “Past years have
shown that increases in both loyalty and conquests are possible if
the pool of return-to-market rises as well. The first half of 2024
showed little-to-no change in return to market, so either loyalty
or conquest were going to be affected.”
Among individual brands, Tesla continues its run as the leader
in brand loyalty with a rate of 67.8% for the first half of 2024.
While all Tesla models retain more than 60% of their previous
owners, the Model 3 remains the leader in the brand's lineup with a
loyalty rate of 72.1%.
“Tesla has historically been a brand with strong loyal ties
among their consumer base, despite a limited product portfolio,”
said Palomarez. “Changes in BEV prioritization among other OEMs,
along with Tesla's directive to cut pricing when needed, has kept
households from defecting.”
Additional mid-year highlights:
- General Motors leads all multi-brand manufacturers in
manufacturer loyalty for the first half of 2024, at 67.7%. - Jaguar, Land Rover, and Lincoln are among the highest
year-over-year gainers in brand loyalty, each improving rates by
more than 6 percentage points. - The Lincoln Nautilus is the current leader in model loyalty at
46.7%.
Get more details on our mid-year analysis by
watching our loyalty webinar. Webinar is available live
[August 29 at 1 pm ET] or on demand.