The road to customer loyalty is paved with partnerships

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The auto world is changing, so manufacturers are linking up with ride-sharing companies

Gaining – and maintaining – automotive customer brand loyalty in a fast-changing market is not easy. Automakers need to not only produce vehicles that consumers want to buy, but also deliver the feature sets owners expect and address their changing needs.

Numbers from the recent 2018 Trade-In Loyalty Report produced by industry-leading car information and shopping platform Edmunds suggest that manufacturers have been doing a reasonable job of this. The report showed that 63% of Toyota trade-ins, for example, went toward the purchase of a new Toyota, a jump of five percent from the 58% reported in the 2007 study.

In the future, however, an array of forces will test the ability of manufacturers to generate and retain customer loyalty. The first of these comes from the changing way consumers – particularly in urban areas – are using cars. From ride-sharing to car-sharing to at-home delivery of just about anything, people in cities see cars differently.

For example, urban consumers are increasingly looking to ride-sharing services, such as Uber and Lyft, to meet day-to-day transportation needs. These services allow them to avoid the costs of car ownership – including insurance, maintenance, gas, and parking – and pay only for what they need.

Just think for a moment about Uber, and the user experience. If you’re an early adopter and have always had good experiences with it, Uber may be the only ride-sharing app on your phone. And when it comes up with new offerings, like Uber Eats, you may well find yourself using them. You are brand loyal to Uber.

The elements of Uber that inspire loyalty come down to a few things. You know what it’s like to use, it’s consistent, and it’s efficient. There’s also a lot of artificial intelligence and machine learning in Uber applications, so that, over time, problems are resolved more quickly.

Not surprisingly, auto makers want to attach themselves to that kind of brand affinity – and new partnerships are forming to facilitate that. You’re seeing automakers and mobility companies partnering to create autonomous-driving capabilities that can be brought to the market at scale. That requires huge investment and comes with a need to partner with others in the ecosystem.

Toyota’s August 2018 announcement of its partnership with Uber is a good example of that need. It included news that the automotive giant is making a $500 million investment in the ride-sharing company, and that they are collaborating “with the aim of advancing and bringing to market autonomous ride-sharing as a mobility service at scale.”

Toyota also revealed that the initial “Autono-MaaS” (Autonomous-Mobility-as-a-Service) fleet will be based on Toyota’s Sienna Minivan platform. Meanwhile, Uber’s Autonomous Driving System and the Toyota Guardian automated safety support system will both be integrated into these Autono-MaaS vehicles.

Collaborations like these are strong examples of the partnerships that the automotive industry will increasingly rely upon to build brand loyalty in the future.

To learn more about Capgemini’s automotive practice, contact Mike Hessler, North America Automotive and Industrial Equipment Lead, at michael.hessler@capgemini.com.

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