7 Ways Auto Manufacturers Can Drive Reputation Forward
2018 has been a challenging year for Auto Manufacturers. After a largely positive 2017 with increased sales and share prices, this year has seen a reversal in the industries’ fortunes.
Auto manufacturers have frequently been in the spotlight, but for mostly the wrong reasons. These companies have experienced declines in reputation and trust. From Elon Musk’s candid Twitter commentary on Tesla’s stock (that lead to SEC intervention) to the arrest of Carlos Ghosn for tax evasion and the planned layoffs of over 15,000 employees at General Motors. Not surprisingly, US Auto manufacturers have seen only marginal growth in sales since early 2017 and dips in share values since early 2018.
What does this mean for the auto manufacturing business and what strategies can they use to get back on the race track?
Our Data and Insights Team conducted an auto manufacturer study during Q1 of 2018 that consisted of 17 global car manufacturers. There were 1,785 respondents from the informed general public, all of which were sampled in the United States.
Here’s what we learned:
- Create multi-dimensional reputational assurance. For auto, winning on Products/Services is not enough. While it’s important, executive leaders must create assurance through Financial Performance, Governance, and Innovation, which are all top dimensions driving auto reputation.
Figure 4: Win on Products – Create Assurance Through Performance, Governance and Innovation
- Highlight your strengths; address your weaknesses. Auto manufacturers must build on their strong performance perception on product-related attributes and strong prospects for future growth, as seen in Figure 5. However, they must also differentiate themselves by highlighting their CR contributions — especially by linking strong quality with cutting-edge innovation. Doing so will improve their weaker attributes while leveraging their stronger ones.
Figure 5: Winning on Innovation Can Differentiate Your Company
- Craft a compelling story about your company. How well companies are performing on key content areas is critical — but what they say (“expressiveness”) and who they are (“persona”) also have a significant impact on their reputation, as seen in Figure 6. While car manufacturers are largely succeeding on what makes them unique, their biggest opportunity to differentiate is by showing how their values align with the general public— the relevancy of their communication must improve.
Figure 6: The Power of Persuasion is Expressing it Well
- Be progressive, yet straightforward. As shown in Figure 7, the informed general public wants a forward thinking and transparent company; negative self-serving associations are to be avoided at all costs. While companies are most likely to be perceived as straightforward and progressive, the level of association is fairly weak.
Figure 7: Be Progressive – Yet Straightforward - and Avoid Negative Associations
- Leverage your CEO. CEO familiarity has reputation benefits for car manufacturers. As Figure 8 shows, when the general public is familiar with a car manufacturer’s CEO, it has a 13.7-point reputation impact. However, CEO familiarity is low; only 9% of the informed general public are aware of any given auto company’s CEO. Furthermore, CEO familiarity benefits perception around innovation - one domain that car manufacturers are seen as weakest in.
Figure 8: Leverage Your CEO for Additional Reputation Gains
- Anticipate reputation risk. Anticipating fallouts from planned and unplanned events — such as GM’s recent layoff and plant closing plans or Carlos Ghosn’s alleged financial misconduct — is critical in managing one’s reputation. Figure 9 shows the projected reputation downside from a leadership crisis on car manufacturers. A potential financial scandal that falls on the CEO has an 11.7-point reputation decline.
Figure 9: Leadership Shortcomings Can Represent a Significant Risk
- Partner with the right suppliers. While it might not be the deciding factor for purchasing a vehicle, having accessories and parts from reputable manufacturers could impact the overall qualitative perception of both corporation and the auto brands. Figure 10 highlights the reputation scores of tire manufacturers and infotainment manufacturers. Goodyear and Michelin stand out as the most reputable tire manufacturers, while Bose is the most reputable in car audio.
Figure 10: Partnering With The Right Suppliers Can Help Your Reputation
US Auto RepTrak 2018
This year, Subaru is the most reputable car manufacturer, with a strong score of 76. Subaru has the highest year over year increase in reputation, with the highest scores in Products/Services and Performance.
Subaru has also developed a winning strategy in corporate responsibility and is consequently perceived as genuine and hard-working. Its reputation is paying off, with eight consecutive years of increased sales, doubling up in the last five years.
Figure 11: US Auto RepTrak® 2018 Ranking
Next Steps for US Auto
In an industry historically centered around product performance, our insights suggest that a much more nuanced and balanced approach is needed to create competitive differentiation. As economic headwinds seem likely for 2019, will car manufacturers rise to the reputational occasion? We’ll keep you posted.