Brand loyalty remains the magic ingredient for automakers as they fight for position in 2020.
But that’s not enough, a panel of industry trackers told an audience at the annual Franchise Assessment Review here Friday at the J.D. Power Auto Summit.
Brand loyalty must be coupled with an automaker’s ability to reel in new customers if the brand expects to grow, said Tyson Jominy, vice president for data and analytics at J.D. Power.
“Customer loyalty illustrates how well a brand is doing,” Jominy said. “But if it’s not also conquesting new customers, the business won’t be sustainable in the long run.”
Retaining customers lowers business costs by taking the pressure off of marketing and incentive spending, Jominy said outside the assessment review, which is an off-the-record discussion of brand specifics for a mostly dealer audience.
The factors driving loyalty in the market are product quality, residual value and dealer relations with the customers. Conquesting is fueled by appealing fresh models, pricing and reputation.
Jominy said that the top three brands mastering both sides of the equation are Ram, Kia and Subaru.
According to J.D. Power’s data, Fiat Chrysler’s Ram truck brand was lifted into the top measure of combined loyalty and conquest by the new popularity of its full-size pickup, Jominy said.
Subaru ranks second in the industry on the measurement for brand mystique, Jominy said.
Some of Subaru’s models have suffered from quality issues lately, but it continues attracting new customers based on its image as an outdoorsy and customer-friendly brand.
Kia’s rise into the No. 3 spot in the loyalty-conquest measure was sparked by its Telluride midsize SUV, a product that has been selling as fast as dealers can get it into the dealership, Jominy said.
“Fresh product is critical,” he said. “But not just any fresh product — it needs to be in high-demand segments.”
Nissan illustrates that challenge. The brand is lagging the industry in conquesting, even though it is introducing new products. But its recent products have been sedans at a time when sedan sales are declining. But in the hot-selling compact-crossover and midsize-pickup segments, Nissan has two aging offerings — its end-of-cycle Rogue and the long-in-the-tooth Frontier.