In the ever-evolving automotive industry, brand loyalty has become a crucial factor in determining an automaker’s success. However, recent trends suggest that the Japanese legacy brand Toyota is experiencing a slip in brand loyalty, and part of the reason can be attributed to the growing influence of the electric vehicle disruptor Tesla.
S&P Global Mobility’s 2023 loyalty ranking of mainstream brands revealed that Toyota dropped to the seventh spot in the first four months of 2023. Meanwhile, American automakers Ford and Chevrolet dominated the rankings.
Unsurprisingly, Tesla led the brand loyalty in the luxury segment by a significant margin.
Ford and Chevrolet lead loyalty ranking for mainstream brands
The January-April survey indicated that Ford and Chevrolet retained the highest customer loyalty rates, with 59.5% and 57.1%, respectively.
Toyota has usually been “neck and neck” with these American automakers, as noted by analyst Tom Libby on an S&P-hosted webinar. However, it now suffered a notable setback, seeing a 5.7-point drop from the previous year to 52.3%.
Industry analysts express concern over Toyota’s underperformance during this period.
“We will obviously have to watch the results going forward, but just in these first four months, Toyota is a disappointment.”
Analyst Tom Libby
Tesla’s impact on mainstream brands
Numerous factors arguably influence brand loyalty in the automotive industry. However, Tesla’s presence continues to make a significant impact.
Automotive News reported that Tesla’s rise might have contributed to Toyota’s decline, with a significant number of customers migrating to the American electric automaker.
Tesla reportedly observed a 2.1-point increase in customer conquests from Toyota alone, reaching 5% year-over-year.
Asian brands feeling the impact
Tesla’s influence is not limited to Toyota, as it is causing ripples across the automotive landscape.
“There’s no doubt that Toyota, Honda, and some other Asian brands are being impacted tremendously by Tesla.”
Analyst Tom Libby
Tesla’s loyalty ranking for luxury brands stands at an impressive 68%, outperforming closest competitors like BMW by a substantial 18.8 points.
In addition, no other luxury brand managed to surpass the 50% loyalty mark, indicating that Tesla is remarkably successful in retaining customers.
Tesla’s unprecedented clout
The impressive customer loyalty shown toward Tesla is unprecedented in the automotive industry.
Tesla’s ability to keep customers engaged and satisfied is a testament to its “extraordinary clout and success,” analyst Libby stated.
Despite not releasing a new vehicle to the market for several years, Tesla’s loyalty ranking remains strong, increasing by 1.1 points.
Impact on fuel type loyalty
Tesla’s advancement is affecting not only overall brand loyalty, but also fuel-type loyalty.
S&P’s data revealed an average EV loyalty of 67.8% in April. However, EV loyalty figures dropped significantly to around 49.7% when the dataset excluded Tesla.
These results suggest that Tesla’s popularity is playing a significant role in shaping customer preferences for EVs.
See Also:
- Tesla ends Ford’s 12-year reign in US Brand Loyalty
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- Tesla ventures into online advertisements, testing new marketing frontier
- Tesla fell 50 spots in a reputable brands survey
- Tesla offers $1000 off and a free three-month trial of FSD under its referral program
As the automotive industry continues to evolve, automakers like Toyota must adapt and innovate to regain customer loyalty amidst Tesla’s disruptive influence.
Tesla’s rise as a frontrunner in brand loyalty signals a shift in consumer preferences and underscores the increasing importance of EVs in shaping the future of the automotive industry.
