New analysis from S&P Global Mobility reveals a significant rise in brand loyalty rates within the automotive industry for the first half of 2024, marking the first year-over-year increase since 2020.
Industry brand loyalty rates have trended upward in the first half of 2024, following several years of flat or declining values, S&P Global Mobility reported.
The industry’s brand loyalty rate through June stands at 52.5 per cent, reflecting a 1.9 percentage point (PP) improvement over the same period in 2023. This marks the first year-over-year increase since 2020, which the group called 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 PPs and 1.4 PPs, 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 of loyalty product management at S&P Global Mobility. “This year, return-to-market volume remains consistent; however, inventory levels are up more than 40 per cent, so households have more opportunity to remain loyal to their previous brand.”
Among individual brands, Tesla continues its run as the leader in brand loyalty with a rate of 67.8 per cent for the first half of 2024. While all Tesla models retain more than 60 per cent of their previous owners, the Model 3 remains the leader in the brand’s lineup with a loyalty rate of 72.1 per cent.
“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.”
The group also noted that General Motors leads all multi-brand manufacturers in manufacturer loyalty for the first half of 2024, at 67.7 per cent.
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