RESEARCH REPORT

In brief

In brief

  • The rise of mobility services is disrupting is raising questions about the future strength and role of OEM's car brands.
  • Our research shows that while these brands will face significant pressure, not all brands will lose their value in all markets.
  • OEMs should therefore listen to customers to learn their mobility preferences, and then reposition their brand around mobility.


The perception: Brand strength still helps

It is thought by some OEMs (Original Equipment Manufacturers) or auto executives that "our brand strength will help to ensure our future success in mobility." But it is also increasingly being said, however, that automotive OEMs are at risk of becoming more like airplane manufacturers such that passengers won't care if their flight is on an Airbus or a Boeing, or their ride is a VW or a BMW, all they will care about is the service and the airline. But is this really true, and, if so – how should OEMs prepare for the challenges which might come from this shift?

Our survey: Revealing the complexities

With competition in the future of mobility services increasing by the day, from Uber and Lyft to Volkswagen and Daimler, we asked our 7,000 respondents—premium and non-premium car owners as well as non-owners—a series of questions on how important 'brand' and other criteria are to them in both purchasing a car and car sharing (or Mobility Services).

Of all the criteria (which included price, speed, flexibility, comfort, environment, and privacy, among others) our respondents overall see 'brand' as the 6th most important factor for buying a car—but only the 10th most important factor for car sharing.

Overall brand importance – all ownership categories, all markets

Mobility Services: The Customer Perspective: Chart with research results for “Car brand importance in the Autonomous Future”

While 'brand' is much less of a factor for car sharing, how important 'brand' is differs based on country, and premium or non-premium offerings. Those differences require different actions.



Results per category of owner

Premium car owners—brand is slipping

In the United States, premium car owners see 'brand' as 3rd most important factor when buying a car, but it slips to 9th most important when car sharing. Similarly, in Europe the importance of 'brand' goes from being 4th most important factor for car purchasing to 10th most important for car sharing. Whereas in China, the importance of 'brand' only slips from the 2nd most important for car purchasing to the 4th most important for car sharing. A smaller and significant difference.

Brand importance for premium car owners

Mobility Services: The Customer Perspective: Chart with research results for “Car brand importance in the Autonomous Future for premium car owners”
Mobility Services: The Customer Perspective: Chart with research results for “Car brand importance in the Autonomous Future for premium car owners”
Mobility Services: The Customer Perspective: Chart with research results for “Car brand importance in the Autonomous Future for premium car owners”

Non-premium car owners—brand is dropping fast

In the United States, non-premium car owners see the importance of 'brand' decline from being the 6th most important factor for car purchasing to being the 12th most important for car sharing. In Europe, 'brand' slips from 6th most important factor for purchasing to 11th most important for car sharing. Whereas in China, 'brand' only drops from 5th most important factor for purchasing to the 9th most important for car sharing—again, a slightly smaller slip.

Brand importance for non-premium car owners

Mobility Services: The Customer Perspective: Chart with research results for “Car brand importance in the Autonomous Future for non-premium car owners”
Mobility Services: The Customer Perspective: Chart with research results for “Car brand importance in the Autonomous Future for non-premium car owners”
Mobility Services: The Customer Perspective: Chart with research results for “Car brand importance in the Autonomous Future for non-premium car owners”

Our observations

Brand strength alone is not enough

Given the comparatively lower importance of 'brand' for car sharing, it’s clear to see that brand strength alone will not ensure future success in mobility, certainly not in Europe and the US. In China, however, there's a nuance that can't be ignored. And it deserves separate thinking, and separate action—as we will outline below.

What now? What next?

Today, as things stand, OEMs—such as big car manufacturing companies—are able to realize significantly higher price points than competitors due to their brand. In a service future, however, the importance of the 'brand' in consumers' minds will erode significantly if nothing changes.

Overall, brand loses in importance. The top choice criteria for car sharing will be price, safety and flexibility/availability. These are the things consumers really want, and desire. The question is: will car manufacturers or mobility service providers listen? It could be the difference between winning and losing in the future of mobility services.

As for mobility services, the top choice criteria for car sharing will be: price, safety and flexibility/availability.

As for brands already in the mobility services sector, Uber’s brand for example is still being valued at 24 billion US dollars just ahead of BMW which is valued at 23 billion US dollars. Going to show that while OEM and car brands might become less important, services brands will still be able to thrive – meaning that the basic concept of branding will certainly not become obsolete.

Our recommendations

Act now. And be market specific.

Whatever the category, or type of customer, or indeed country, our recommendation is that every OEM striving to enter Mobility Services must act now and use its existing sales-reach and relationships to reposition their brand. But, depending on the category, and country, there are differences in what those actions should be.

Which means: OEMs need to focus on the key customer preferences for mobility services in each market, and find ways to reflect them in their brand strategies:

USA

Price, safety, convenience

Europe

Price, safety, flexibility/availability

China

Safety, car performance, price

View All

Recommendations for premium OEMs in China

For OEMs selling to premium car owners in China the drop in brand importance from car purchase to car sharing is smallest, slipping only from 2nd to 4th place. As a result, our recommendation for premium OEMs in China is to develop the brand: Mobility-as-as-Service status symbol. This could be a crucial difference.

Recommendations for non-premium OEMS globally

For non-premium car owners in USA, Europe and China, the brand will only play a minor role in car sharing. As a result, there are two options for non-premium OEMs in this challenge of brand importance and salvaging brand value:

Option 1

Broaden the scope of the brand from car ownership to other fields such as service offerings and lifestyle products.

Option 2

Become the leader for "new mobility" brands (focus on Europe and USA, since in China the competition is already very strong).

View All


About the Authors

Axel Schmidt

Senior Managing Director – Global Mobility Industry Lead


Juergen Reers

Managing Director – Mobility X.0 Lead


Alexander Huber

Managing Director – Automotive


Daniel Tegtmeyer

Senior Manager – Automotive


Tobias Kruse

Business Design Director – Fjord, Regional

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