These automakers can’t quite hold back their first-time buyers

Photo: Joe Raedle (Getty Images)

Some automakers are struggling to convince first-time buyers to return to the showroom, Elon Musk said he really believed he could take Tesla private in 2018 with help, and Audi sued Nio and won. All this and more in The morning shift for January 24, 2023.

1st gear: the “Nomadic retention challenge”

There’s apparently a name for people who buy a car from a brand, but don’t buy their next vehicle from that same brand. Analysts call them “nomads”. I would have assumed that half or a slight majority of buyers operate this way, but that’s obviously not the industry expectation. Nissan really believes it has a chance of keeping you in the family for life just because you got a decent lease on a Kicking Once. Go figure.

Either way, data from S&P Global purports to show which brands are failing the “nomad retention challenge” the most and which are succeeding. The answers are actually a bit surprising, at least in the first category. Courtesy Automotive News:

Dodge, Ram, Audi, Mazda, GMC, Volkswagen, Acura and Mercedes-Benz are all in the heat of a “nomadic retention challenge” in the United States, according to a report from S&P Global Mobility.

This means that these eight brands face the challenge of keeping their winning customers. [new customers not previously within a brand’s base] to be “one and done” and go elsewhere after a purchase, the research firm said.

These brands were one of the three main groups identified in the S&P Global analysis of the retention and defection of so-called nomadic customers with unidentifiable loyalty patterns.

On the other side of this challenge are Tesla, Subaru, Jeep, Kia, Hyundai and BMW – brands with a high share of returning nomads and higher retention. Tesla stood out here, with a share of new owners at 83% and the lowest rate of any brand measured at 39%.

As you might expect, S&P has a prototypical nomad profile: they apparently have high disposable income, live in the suburbs, and having a predisposition to “chase the latest fashionable product”.

“Conquer loyalty” (sheesh, that marketing jargon) appears to be a growing concern for most automakers, as data collected last July revealed that 58% of nomads chose to leave their previous brand with their latest. car purchase in the previous 12 months. Anyway, you must be wondering why precisely Mercedes-Benz and Audi are struggling with this problem, while BMW apparently is not.

Every few weeks I get another notice from the dealership where I bought my Fiesta ST five years ago that my hot hatch is in high demand, but unless Ford suddenly decides to resurrect all of its compact passenger cars d ‘between the dead, the chances of them recovering this one is not high.

2nd Gear: Elon Really Thought He Could Do It

Tesla CEO spoke a second time on Monday defend that infamous ‘funding secure’ tweet from 2018, saying he believed he had the backing of Saudi Arabia’s sovereign wealth fund and that his shares in SpaceX would have helped him take the electric carmaker private. Courtesy Reuters:

During a trial in federal court in San Francisco, the billionaire, who said he was tired from lack of sleep, spoke quietly and calmly during about five hours of testimony.

“With SpaceX shares alone, I felt the funding was secure” for the takeover, he told a jury, referring to the aerospace company of which he is also CEO, without giving details.

But Nicholas Porritt, the lawyer for the plaintiff investors, raised doubts about whether he had sought to use his stake in SpaceX to finance the deal, which would have increased his stake in Tesla. Porritt pointed out that Musk told Tesla employees at the time that he expected his stake in Tesla to remain similar after the deal.

Musk also recounted the fateful meeting with Saudi officials:

Musk told Porritt that he met on July 31, 2018, with representatives of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, at Tesla’s factory in Fremont, California.

He acknowledged that a takeover price had not been discussed, but said Saudi officials had made it clear they would do whatever it took to make the takeover happen.

That never happened, Musk said, because fund governor Yasir Al-Rumayyan later backtracked on his commitment to take Tesla private.

“I was very upset because he had been unequivocal in his support for Tesla’s privatization when we met and now he seemed to be backtracking,” Musk said.

This testimony appears to contradict the minutes of the meeting itself admitted in court as evidence, indicating that Al-Rumayyan was not “unequivocally in his support”, as Musk put it, but asked additional information to the CEO. Musk will speak again today; let’s hope opposing counsel will entice him more to talk about the “significance in the cultivation of marijuana” of the proposed stock price of $420.

3rd Gear: impending job cuts for Ford Europe

In yesterday morning shift we discussed Ford’s plans to lay off at least 1,000 employees from its European operations, mostly at its plant in Cologne, Germany, previously known for building the Fiesta. Today we have a bit more information thanks to the country’s IG Metall union, and it turns out that the number could actually be closer to 3,700 jobs. From Reuters:

The company wants to cut up to 2,500 jobs in product development and up to 700 in administrative roles, with German sites the worst hit, IG Metall said.

Workers at the US automaker’s Cologne site, which employs around 14,000 people – including 3,800 at a development center in the Merkenich region – were briefed on the plans during works council meetings on Monday.

Ford’s spokesperson in Germany declined to comment, referring to a statement on Friday in which he said the shift to electric vehicle (EV) production requires structural changes and would say no more. until plans are finalized.

Ford doesn’t expect to have a concrete number until the spring. The manufacturer uses about 45,000 in Europe in total.

4th gear: Nio was ordered to lose the “S”

Audi and Nio have been locked in a dispute over vehicle names since late 2021, with the German automaker alleging that the Chinese EV startup’s model names, like ES6 and ES8, are too similar to its own, which are like that but without the “E.” A Munich district court ruled in favor of the Ingolstadt-based brand, per Automotive weeks. Typically, I’d scream home-court advantage, but the basis for the decision is actually pretty solid. Translated, it reads as follows:

The [court’s] the reasoning continues: “The board explained that it is therefore to be expected that a not inconsiderable part of the target group of persons will also see the ‘E’ in the contested sign and therefore the only difference between the two signs as descriptive in Understand this and see it only as an indication of the vehicle’s engine type. There is a risk that consumers assume that the “ES 6” is the “S 6” in the electric version, that the two vehicles are from the same manufacturer. There is therefore a risk of transfer of confusion by association which goes beyond pure association.

The penalty is a $270,000 fine for Nio and/or potentially a six-month sentence. prison sentence for the managing director of the company’s German division. The latter seems quite stiff! Additionally, Nio cannot advertise the affected cars in the country at this time. This isn’t a big deal as the brand hadn’t started offering the ES6 or ES8 there yet, and the ES7 was aptly renamed “EL7” just for Europe. It’s almost as if they knew it was coming.

5th gear: Volkswagen has a new head of design

Volkswagen cars, on the whole, look a bit boring. Not bath, but also very easy to ignore in traffic. (The Arteon and ID.Buzz get passes, of course.) It seems VW management agrees the brand needs a shake-up, having just replaced its current design chief, Josef Kaban, with formerly Bentley’s Andreas Mindt. Once again, from Automotive News:

New VW brand CEO Thomas Schaefer was unimpressed with some of Kaban’s designs, sources say.

Kaban was asked to modify the retro styling of the ID Life concept unveiled at the 2021 Munich IAA auto show for a more modern look. The concept was meant to preview the look of VW’s entry-level ID electric car slated for 2025.

Schaefer also asked Kaban’s design team to rework the styling of VW’s upcoming Trinity flagship electric vehicle to give it a crossover look instead of a sedan appearance.

Kaban started his career in 1999 at VW Group, where he worked for Audi, Bugatti and Skoda.

Kaban is not leaving the fold entirely, as he is expected to move elsewhere within the VW Group family. The personnel changes have not yet been officially announced, but are expected to take effect on February 1.

Reverse: A boy named Jenson

On this day 23 years ago, Jenson Button, 20, became England’s youngest Formula 1 driver at the time, signing a multi-year contract with Williams BMW. He will only stay there for a year, before the team lends him to Benneton, who will become Renault. From 365 days of driving:

“I’m still on cloud nine,” Button said as he moved to face the media. “The last 45 minutes were incredible; hard to explain as I have never experienced anything like this before. [Stirling] Moss was full of praise. “It’s a fantastic achievement and I wish him all the best,” he said. “Obviously I’m sorry to have been kicked out of the record books as Britain’s youngest F1 driver, but never mind. We’ll have to start calling him ‘The Boy’, as they called me when I was new. .”

The irreplaceable Stirling MossLadies and gentlemen.

Neutral: Nomad or Loyalist?

Be honest: are you a “loyalist” to a manufacturer? Ford probably would have kept me if he hadn’t killed off the only things I cared about.

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