Five Top Companies for Brand Loyalty (But Where's Tesla?)

Jim Motavalli

Jim Motavalli | Jul 01, 2015

The Ford C-Max Hybrid: The companies with the most high-quality, diverse product lines win the loyalty sweepstakes. (Martin Campbell/Flickr)Which automaker has the best brand loyalty in the business? IHS Automotive has been investigating that very question, and it’s got a first-quarter 2015 Top Five ranking you need to see:
  1. Ford (64.9 percent)
  2. Nissan (59.1 percent)
  3. Mercedes-Benz (58.5 percent)
  4. BMW (58.3 percent)
  5. Toyota (58.3 percent, tie) 
It’s impressive that Ford is displaying such high numbers, and all these mainstream automakers have diverse, high-quality product lines that give customers a reason to go back. Tom Libby, an IHS auto analyst, explained to me that the company’s survey measures customers who, within 10 years, go back to the same manufacturer for another new car.
That measure obviously favors automakers with lots of models, because you can trade in your sports car in favor of a minivan or SUV and not switch brands. “If they don’t have what you want, you’ll have to leave the brand,” Libby said. That’s why the trend of supercar makers to add SUVs (or cheaper models) to their portfolios probably increases their brand loyalty.  
Libby said that leasing is on the rise, and that increases brand loyalty while at the same time making it harder for automakers to make “conquest” sales.
I get all this, but I have a question: What about electric cars, particularly Tesla? In IHS’ survey, Tesla came in at a so-so 54.4 percent. It’s impossible to measure other EVs this way, because they’re not stand-alone brands. According to Tesla spokesman Alexis Georgeson, "This analysis doesn’t seem particularly applicable to Tesla since we haven’t even been producing vehicles for a decade."

Jessica Caldwell, an Edmunds auto analyst, sees some issues with the IHS poll. "I get what you're saying," she said. "it's not exactly comparing apples to apples but I'm not sure you can account for it another way. This [lower loyalty numbers] will be the case for other new brands--Fiat, Alfa Romeo as well. Generally, when there's only one car in your line up like Tesla, we don't see massive loyalty anyhow. Brands with more homogeneous lines up (e.g. Scion, mini, Smart) see lower loyalty rates than fuller-line brands."

 An object of desire--and intense loyalty!--the Tesla Model S. (Ted Eytan/Flickr)Tesla clearly has very high brand loyalty, but it’s not likely to score high in a test like this. Why? For one thing, it’s only had two models (Model S and Roadster), and (until the Model X finally comes out) only one is available. Plus, the first cars weren’t made available until 2006, so the brand doesn’t even have 10 years of history.
Libby did say that “it’s unusual for a company to have such high brand loyalty with only one model,” but I’m guessing that Tesla is actually off the charts if viewed objectively.
A new proprietary survey of 145 Tesla owners by Jeffries revealed that “85 percent of the brand’s owners plan to purchase a Tesla car again, and 89 percent would buy another Tesla vehicle even if the $7,500 federal tax credits were not available to them.” And 83 percent would (and do) recommend the car to friends. A respectable 25 percent say they “are not even considering the purchase of any other brand of vehicle.” Georgeson also points out that "market-research firm Strategic Vision recently announced Model S came out on top as the “most loved” car in their study which surveyed 534,000 vehicle owners."

Elon Musk has what his customers want--a Model S. (Maurizio Pesce/Flickr) Wow. Almost 70 percent of Tesla owners previously owned a cheaper car, and were willing to pay a 60 percent premium to own the plug-in supercar. I’ve actually never met a Tesla owner who wasn’t profoundly partisan about the company.
Actually, nearly every EV owner I’ve met was an enthusiast for the brand, and for the cars in general. “Many EV drivers today derive an emotional attachment from driving something that isn’t your typical gas-powered car,” reports The Motley Fool. Yes, Apple customers are similar.
And, of course, Consumer Reports gave the Model S its highest owner-satisfaction score ever, 99 out of 100. "These results suggest Tesla owners are very, very satisfied,” said Jake Fisher, Consumer Reports’ director of automotive testing.
So, whatever this particular poll shows, I’d guarantee that Tesla is a Top Five loyalty placer. Other brands that are doing well, with 10-year-high loyalty rates, are Chevrolet, GMC, Infiniti, Jeep, Land Rover, Lexus, Lincoln, Mazda, Mitsubishi, Porsche (which also gets penalized for concentrating on sports cars, but its recent venture into SUVs helps), Subaru and Volvo (also diversifying).
In general, the number of models available in the U.S. is rising rapidly, up 12 percent (33 new cars) between 2005 and 2012. That means offering something for everyone, and it’s popular today.

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