While the U.S. has long lagged the rest of the world in accepting electric vehicles (E.V.), Prophet’s new research shows that this may finally be changing. It also demonstrates that Asian brands already have clear advantages in the automotive category. But to keep winning, another trend is equally apparent: To be considered indispensable to American consumers, auto companies need to reposition themselves more as tech brands.
Findings in the 2021 Prophet Brand Relevance Index® (BRI) underscore just how pivotal a moment we are at. It has taken years, but external changes, including government mandates on carbon emission, manufacturers’ promises to move towards all-electric fleets and the increasing acceptance of strong players such as Tesla, Canoo and NIO, have led the auto industry to an inflection point. US consumers are finally changing their expectations towards automobiles. And here is why.
Reliability Wins the Race
For the first time in the BRI’s six-year history, Honda has leaped into the Top 10. Consumers give it ultra-high scores for dependability and “Lives up to its promises.” Toyota, which is beloved for popularizing hybrid cars, also ranks No. 14, because it excels in these attributes too.
Switching Gear to High Tech
However, the BRI delves beyond practical product factors and gauges how innovative, inspirational and engaging brands are perceived to be by consumers. While heritage brands like Honda and Toyota are highly relevant today, they fall short of other technology brands on these dimensions.
This offers more profound lessons for auto companies. Auto companies have long been injecting more tech into their vehicles and their marketing, but they still act like car companies.
Tech companies have a different way of showing up in the world.
With rapid innovation and deep connections to consumers, they have become pillars of relentless relevance. They earn admiration and respect in ways no other brands today.
Apple is again the No. 1 brand in Prophet’s ranking, as it has been in every single BRI study conducted in the U.S. People love how it makes daily life easier and say it is a top brand they can’t imagine living without. Spotify (No. 12) is another company that has made itself indispensable, artfully weaving itself into people’s routines. The same goes for Netflix (No. 18), recognized for pushing the status quo and helping many through the pandemic. All these technology leaders are building powerful emotional connections with their customers.
And as these tech brands race into the automotive category, traditional automakers are highly vulnerable. Chinese tech giant Baidu saw its stock climb after it announced it was working with automaker Geely (who acquired Volvo) to launch a new E.V. venture. And while less is known about Apple’s plans, it reportedly intends to launch its E.V. in 2024.
Beyond Apple, there are other disruptors emerging in the U.S. include Rivian, a joint venture between Amazon and Ford Motor Co., that has just gone through a massive public offering. And investors are already trading shares of Canoo, an intriguing model that pairs its new E.V.s with a subscription model.
If traditional auto brands want to hold their own against these emerging tech-auto brands, they’ll need to step up their offerings around innovation and intelligent technology to build stronger emotional ties.
Some are. For instance, Hyundai (No. 28) scores an impressive 90% on both “connects with me emotionally” and “engages with me in new and creative ways.” Despite scoring higher overall, both Honda and Toyota are weaker in those dimensions.
Hyundai is gaining that relevance edge by finding high-impact ways to connect to young car buyers. Its recent launch of the IONIQ brand (E.V./ hybrid model) collaborated with BTS, its global ambassador, to release a new song, gaining 26 million views on Youtube to date. Before that, Hyundai’s beautiful Earth Day campaign video featuring BTS was watched over 105 million times. Such moves undoubtedly build an unparalleled emotional connection with Gen Z consumers.
Next Steps to Build Relevance
E.V.s and AI technology are inevitable, igniting consumer curiosity and consideration in the lucrative U.S. market. Asian auto brands, already well known for dependability and trustworthiness, can’t afford to let this opportunity pass.
Honda is said to have developed industry-leading “level 3” autonomous driving technology that is set to be launched in March. This will be an excellent opportunity for the renowned automaker to evolve its brand positioning to be more aspiring and technology-driven.
We believe an important route to success for Asian auto brands is to learn to think and behave like tech companies. In order to ignite fresh energy in the brand, they must…
- Lead from the heart, finding new ways to create emotional connections with consumers and deploying marketing strategies that emphasize optimism and aspirations.
- Leverage the power of global partnerships, both with Asian and Western brands. This is the fastest way to expand a company’s skillset and an important avenue to new customers.
- Highlight innovations. With so many companies producing new and unexpected approaches to E.V.s, brands must work harder to spotlight their new technology.
Want to learn how your brand can succeed in the U.S. market? Talk to us.