2024 sees boost in auto brand loyalty, reversing years of decline

Author

Colin Velez
August 30, 2024

Consumers are sticking with the makes and models they prefer more often, marking the first increase in brand loyalty since 2020.

Driving the news: S&P Global tracked a slight improvement in brand loyalty from 2023, an encouraging reversal after four years of declines.

  • Customers bought from the same automaker as their previous purchase at a rate of 52.5%, up roughly 2% from last year.

  • That’s still below 2020 levels of 54.8% but reflects an improvement over both 2022 and 2023.

Why this happened: Inventory shortages caused by COVID-19 have restricted consumer choice for the last four years. This forced buyers to search for alternatives, slowly lowering brand loyalty rates. The increase in new vehicle supply between 2023 and 2024 has allowed buyers to purchase from the same automaker more often, making room for this year’s recovery.

Zooming in: This year’s jump in loyalty came at the expense of conquest rates (the pace at which buyers “convert” to a different brand). That’s completely expected, given the two metrics typically move in opposite directions. However, S&P Global notes it’s quite possible for both to increase at the same time if the number of buyers on the market increases as well.

Between the lines: Several automakers stood out from the pack in terms of customer choice.

  • Tesla buyers remain the most loyal in the industry, with 67.8% sticking with the brand in 2024. Model 3 owners are especially devoted, purchasing the same vehicle at a rate of 72.1%.

  • General Motors’ loyalty rates outpaced all other multi-brand car manufacturers, resting just behind Tesla’s at 67.7%.

  • According to S&P Global, the industry’s recent pullback from the electric vehicle market may be partly to blame for Tesla’s continued leadership.

"Tesla has historically been a brand with strong loyal ties among their consumer base, despite a limited product portfolio. Changes in BEV prioritization among other OEMs, along with Tesla's directive to cut pricing when needed, has kept households from defecting."

Vince Palomarez, Associate Director, Loyalty Product Management, S&P Global Mobility

Bottom line: It’s encouraging that brand loyalty has started to improve after years of decline. At the same time, it seems this is due more to inventory growth rather than effective marketing from manufacturers. As supply levels continue to normalize, it will be interesting to see if those investments begin to improve customer retention at the brand level.

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