We’re all familiar I think with the fierce loyalty that some brands can attract, one of the most notable being Harley-Davidson Motor Cycles where some owners have gone so far as to tattoo the badge onto their body, demonstrating their lifelong commitment to the brand.
(You certainly hope so anyway, as it would become embarrassing later in life when you decided that BMW was more your style – only slightly better than having the name of your first love printed into your flesh when you’ve moved on in life.)
The reality however is that some brands do build lifelong loyalty, and that makes life a lot easier for the owners of those brands who can count on a certain amount of repeat business, regardless of how many newcomers arrive on the scene.
Loyalty clearly matters at all levels, a sales executive who builds up a personal clientele, a dealership who can count on customers returning to them for their next new car and for aftersales, and the OEM brands themselves.
As long as we keep serving those customers with great product and personalised attention, then they are likely to keep coming back, even when things change.
The sales executive switches employers, the dealership switches brands, or the OEM pursues (perhaps because they are forced to) new technologies.
On the latter point, think Porsche moving from air cooled to water cooled engines, and then from normally aspirated to turbocharged engines. Those two switches seem to have been navigated reasonably well, but the current transition from ICE to BEV is proving more difficult – at least as we see it from today’s viewpoint.
Where loyalty tends to fail is where the customer has a bad experience, or they feel let down.
Defining this is not straightforward. The relatively poor reliability of Range Rovers over many years is not a secret and it has been specifically referred to by successive CEOs as an urgent part of the strategic agenda.
Yet the faults keep recurring – and the customers keep returning. It is not unusual for a Range Rover customer to order their next car whilst visiting the dealership for yet another fix to their current car.
Hugely impressive at one level, but not a case study to be followed by others. Some years ago before Rolls-Royce and Bentley went their separate ways under German ownership, I was involved in a team looking to buy the business from the then-owners, Vickers plc.
The ageing technology in the product was becoming an embarrassment, and if you are spending substantial sums on a Rolls-Royce you are hoping for a degree of respect rather than ridicule.
Bentley was flourishing by upping the engine power and recalling the glory days of the 1920s and Le Mans victories.
However Rolls-Royce had little new to offer, and the technology in the Ford Fiesta that the would-be buyer might get for his or her daughter or au pair, was actually superior to the contemporary Rolls Royce. Rolls-Royce sales had fallen to just 4% of the total output, as once-loyal buyers felt that they were not being well-served.
I saw an article in Automotive News Europe on Saturday that looked at this issue from a slightly different angle.
This is looking at loyalty at a brand level nationally – how the Chinese brands are struggling to make progress in Germany in the face of customer and dealer loyalty to the established brands – largely, but not solely German.
Viewed from a Dutch or UK perspective where we no longer have a ‘buy national’ mentality or option, it seems strange to see claims of “fading enthusiasm for German brands within the dealer network” and the suggestion that Chinese brands will be contained to a market share (each) of 0.5% to 1.0%.
Although the purity of brands’ nationalities is now extremely diluted (some BMW and Volvo from China, some BMW and Mercedes from the US, for example), the reality is that in two of Europe’s biggest markets, there is a bias towards buying the national brands.
In Germany, the ‘home brands’ – so VW, Mercedes, BMW, Audi, Opel and Porsche took just over 50% market share in 2024.
In France, the combined share of Renault (including Alpine and Dacia), Peugeot and Citroen (including DS) was not far behind at 46%.
By comparison, across Europe as a whole including the UK, the same German brands captured only 31% share and the French brands 18%.
This shows the power of familiarity with the brand and an established and committed dealer network, but also I would argue some remaining degree of wanting to support the ‘local’ brand.
The argument put forward by some of the interviewees in the Automotive News Europe article is that this national brand loyalty is what will hold back the progress of the Chinese brands in Germany, and that this is giving the home brands the opportunity to close the competitive gap.
It might be that it will be customers rather than tariffs that have the greatest effect on the progress of the Chinese.
And that will be a much more difficult hurdle to cross – tariffs are just another element in the cost structure, and localisation of manufacture can circumvent that to some extent.
Making customers in France and Germany abandon their trusted home brands to try something new is clearly a much greater challenge where even the other established brands have failed to make much headway over decades. Game on!