This article originally appeared on Automotive World.
Trade wars, emission limits and competition from technology companies have all contributed to what is now a complex automotive landscape – and these factors have seen two-thirds of automotive brands slide down the rankings of our annual study, The World’s Simplest Brands. However, against this context Honda has improved eight places.
Why ‘simplicity’ matters for automotive brands
To fully understand the value that simplicity brings to companies that embrace it, we have conducted this study since 2009. In the 2018 study, 15,750 consumers were surveyed across nine countries, and asked to evaluate 800 brands against five dimensions of simplicity: Ease of understanding what is communicated; Transparency and honesty; Empathy with and fulfillment of relevant customer needs; Innovation and freshness; and Usefulness of the experience.
The research shows that 55% of consumers are willing to pay more for simpler experiences. In the automotive industry in particular, the simplicity premium is greatest, and estimated to be over 20%. If the automotive customer journey becomes relatively more complex, companies will instead be penalized with less willingness to pay.
Honda defies the odds
Unlike the other automotive brands in the study, Honda resists consolidation and maintains its independence. This allows it to deliver a more simple, consistent message over time. Despite this advantage, it does not isolate itself, confronting the challenges facing the industry by embracing strategic partnerships from around the world. This allows it to maintain focus whilst also being at the forefront of mobility innovation.
The Honda group spans a wide range of vehicle types, making it the world’s largest manufacturer of engines. Being spread across automobiles, motorcycles, aircraft and boats cushions the brand from the turbulence affecting the automotive market.
But most importantly, Honda has a strong sense of purpose. The ‘Power of Dreams’ philosophy challenges convention in the pursuit of dreams, but behind this is a fundamental belief in making customers happy and improving customers’ lives.
Toyota is the second placed automotive company in the World’s Simplest Brands, and like its Japanese peer, it shares a focus on purpose. In late 2017, Toyota launched Start Your Impossible–a global initiative designed to inspire employees, partners and customers to connect with their values and beliefs. Part of this is a renewed commitment to a more inclusive and sustainable society and freedom of mobility for all.
Unsurprisingly, both Honda and Toyota are the leaders in hybrid cars, with 20 years’ experience building, marketing and servicing mass-market models. This gives them a unique advantage as the automotive category evolves.
The movers and shakers
Other automotive companies are being recognized regionally with ranking gains for targeting complexity at key points in the customer journey. In Western Europe, Audi is the Simplest Mobility brand, with gains reflecting a focus on using digital channels to bring ease to the purchase process. This includes a new digital showroom and app-enabled hiring service that makes it easier to test drive, compare and purchase or lease new Audi models. In North America, Chevrolet has also improved its position through greater focus on convenience with a concierge service that allows customers to have the totality of the shopping experience without stepping foot into a dealership.
In contrast, Hyundai, as well as Volkswagen in the UK, see the biggest slides in the category – showing that trust and transparency are essential prerequisites to a simple brand experience. Both companies were accused of rigging tests in 2015, deceiving consumers about fuel efficiency and emissions and leading to financial penalties and negative consumer advocacy.
Of ten global brands ranked in order, the World’s Simplest Automotive Brands in 2018 were Honda, Toyota, Volkswagen, Ford and Audi.
A place for ride-sharing services?
Lyft has established itself as the USA’s Simplest Brand – significantly ahead of Honda in the market. Consumers like how easy it is to register, book a ride and pay, with expansion into 300 cities bringing Lyft to the masses.
In contrast, its global competitor Uber sits significantly behind the top automotive brands in all global markets (including in the USA). Expansion into delivery and other mobility services has blurred the proposition, and led to its withdrawal or prohibition from major European cities; China brings uncertainty, but like Volkswagen and Hyundai, it’s a lack of transparency and honesty that brings complexity to the Uber experience.
In short, new technology companies have an advantage over traditional automotive brands in the battle for mobility customers, but trust in delivering on a promise remains the essential foundation for simple journeys.
Ben Osborne is Director of Insights EMEA at Siegel+Gale
To browse the full rankings by country visit SimplicityIndex.com.